Importance of CIBIL Score

CIBIL score, Importance of CIBIL Score

What is CIBIL Score?

CIBIL TransUnion Score is a set of points awarded to all individuals or businesses regarding their credit history. CIBIL or Credit Information Bureau of India Limited is a Credit Information Company that is primarily involved in collecting and maintaining data related to all the borrowers of banks. It maintains a consolidated database of all the borrowers and after analyzing their credit record awards a score which indicates delays or loan defaults.

What’s great about the CIBIL Score?

All the banks make an assessment of the CIBIL TransUnion score to know the credit record of the borrower,  so a good CIBIL TransUnion score always improves the chances of your loan approval. When the prospective borrower has high scores the bank sees them as less risky investments and hence having a higher score can get you a loan at even lower interest rates.

What’s an Ideal CIBIL Score?

While the general Credit score ranges from 300-900, 300 being the lower end and 900 being the best. Many banks take a TransUnion score of 750+ as a minimum for approval.

CIBIL score, Importance of CIBIL Score

How do I check the CIBIL TransUnion Score?

  • Fill an application form on the CIBIL website
  • Fill the necessary details and make the payment of Rs.470*
  • Once approved you will get further information from CIBIL about your TransUnion score.

How can I improve my Credit Score/Company Credit Report(for companies)?

  • Make a timely payment towards all your credit dues of company & members.
  • Make timely payments towards all your EMIs.
  • Avoid late payment or non-payment of your EMIs or Credit Card dues.
  • Avoid maxing out the credit card dues of members.
  • Avoid taking too many unsecured loans.

Repair your Credit Score score

You can repair or buy a better score in the following cases:

  1. Inaccurate information reflecting on the CIR
  2. Defaults on the payment caused either due to :
  • Genuine financial hardship
  • Missed payments on credit cards due to relocation internationally/ domestically
  • Missed payments on non-receipt of statement
  • Disputes with the lender on account of charges or annual fees
  • Disputes with the lender on account of fraud
    Visit CIBIL Website for more details

Really low Score, what does it mean?

  • -1: If you have never taken a loan in your life, due to the lack of your credit history data you score may show as -1
  • 0 : 0 means that information about the borrower’s credit history is available only up to a period of fewer than 6 months in total. Also known as “NA” or “not applicable”.