What is CIBIL What is CIBIL, CIBIL Score
CIBIL ie CIBIL is called Credit Information Bureau India Limited. It is a company that provides credit information. This company maintains records of all credit related information and activities of individuals and organizations.
Whenever any person applies for a loan, then his CIBIL is checked. Banks, non-banking finance companies and other financial institutions send the customer’s credit information to bureaus where its records are maintained. Based on this information, CIBIL issues a Credit Information Report (CIR) and assigns a credit score to the customer. This is called CIBIL score.
The CIBIL score of any person lies between 300 and 900. CIBIL is a three digit number, which shows the borrowing capacity of any individual. A high credit score helps one get faster approval and better deals on loans and credit cards. Explain that most banks and non-bank financial institutions consider the minimum credit score required for loan approval to be 685 or more.
From this score, the lending bank or institution gets to know how likely a person is to repay the loan on time. Having a good score means that the person has a good track record and is less likely to default on the loan. Similarly, having a low CIBIL score means that banks become cautious. Despite this, many times banks give loans after checking on their behalf as well.
Hope it is understood what is CIBIL score. Now let’s talk that if you do financial transactions, have a credit card, then you should keep some vigilance to avoid bad CIBIL score. Let us understand what are the ways to improve your CIBIL score.
Read this also – What is the use of CIBIL, how it is made, all the information here
Your CIBIL Rating, which is determined on the basis of your CIBIL Report, is an essential part of your credit record. Generally, having a CIBIL score of less than 750 leads to difficulties in getting a loan or credit card, but experts say that this score can be improved.
Timely payment of any loan is necessary
If a person has taken a loan, then it becomes necessary that the loan is repaid on time. If the payment is not made in time, then the CIBIL score gets greatly affected. It should be an effort that the EMI of the loan is paid on time. If you want the next loan without any problem, then it is important that the payment of EMI continues on time.
pay credit card bill on time
To keep your CIBIL correct, it is necessary to pay all credit card bills on time. Dues should not be kept. Experts say that if you want to improve the CIBIL score, then pay the credit card bills before the due date. This will go a long way in improving the credit score.
don’t make this simple mistake
Banking experts say that a person should avoid opening a joint account with an outsider. Many times it happens that the person with whom you have a shared account defaults somewhere and its effect also comes on your CIBIL. Apart from this, becoming someone’s guarantor for the loan should also be avoided. Here also the mistake of that other person can harm you. Therefore, in such cases, connect only with close and trusted people.
Don’t take too many loans at one time
Banking system experts say that in order to maintain a good credit score, one should avoid taking more than one loan at a time. If possible, take loan one by one. On taking more loan, it is feared that there may be a default in repaying the loan. There may be shortage of money. The credit score becomes good if the loan is paid on time. The credit score becomes good if the loan is paid on time one after the other.
Use credit card within a limit
In today’s time, people consider keeping credit as fashion, some consider it a necessity, some smart people even earn from these credit cards. But experts say that the easiest way to maintain a good CIBIL score is to never use the full credit card limit. Using only 30 percent of your credit card limit every month is beneficial in improving your score.
keep your records updated
If you have taken a loan and you have fully repaid it. So make sure that the bank is also showing the loan as repaid in its records. Sometimes the negligence of the banks takes a heavy toll on you. For this it is necessary that your credit score should be checked from time to time. If any deficiency is found, it should be rectified immediately. Please tell that credit score can be improved from 4 months to 12-13 months.