What is CIBIL & How to improve credit score?
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- Updated On:05-Feb-2021
- Replies:3
Short Answer
CIBIL is your credit worthiness report. Before giving any loans or credit cards, banks check your CIBIL score to get an idea of you loan repayment capacity.
Detailed Answer
CIBIL is a 3 digit numeric code, a database of your credit information. A set of your past credit records and a criteria to know your credit worthiness. Banks and NBFCs primarily check your CIBIL score before approving your loan or credit card. Having a good CIBIL score can help you fetch good loans and credit cards.
I think a CIBIL score above 750 is good enough. You can get easy loan and credit card approval if you have good credit score. What are your views? Clearing credit card bills on time is one way to build good score for getting personal loans approved.
Paying your credit card bills on time is a great way to improve your credit score. If you think of applying for a personal loan, having an already good CIBIL increases the chances of easy approvals. A score between 750-900 usually enhances the possibility to get good amount of loan and quick approval.
Banks and NBFCs generally check your credit history before sanctioning any fresh loan.
CIBIL - Important Points to Note:
- If you have not taken any loan or credit card then your CIBIL profile is not created and your CIBIL score comes out to be -1.
- In case you have taken loans and use credit card, you score will vary between 300 to 900.
- Where 300 is the worst CIBIL score and banks can reject giving loans a or credit card to you.
- CIBIL is updated regularly, within 30-45 days.
- So even if you have bad CIBIL score today, you may score good in 3-4 months time.
- CIBIL Is going to be a de-facto standard going forward for loan approvals and credit card limits.
- CIBIL score can be improved by discipline only.
- Get a decent card, and pay all bills on time.
- Also, don't use credit card for more than 40% of total limit.
I read somewhere that they check usage to limit ratio too while giving CIBIL rating. Follow the simple steps to improve your credit score and within few months you would be able to get good CIBIL score.
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Discussion (2)
Thanks for giving useful advice on improving Credit score. This seems to be a nice platform where one gets quick answers on different financial topics. I was also looking for ways to enhance my credit score. Presently its around 550 only. I have 2 credit cards, got a new one issued recently only. Some free card offer was going on, so got that. But, just came to know that too many cards can hamper score. Having 2 is ok, I think. I am regular in paying bills for my first credit card. Haven't still used the second one. Should I use the second card? Will it positively affect my score if I pay both their bills on time.
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Basically Credit Information Report (CIR) is the summary of the payment history of how sincerely you have been paying your loan and credit card dues from any bank or financial institutions. Based on that the ‘credit Score’ is generated. It is a 3 digit numeric which ranges from 300-900, the closer the score is to 900 the stronger your profile is. Credit score determines the worthiness of the person to pay back the lenders. What should you do to improve your CIBIL Score? 1. Most effective way is to pay your credit payments on time. 2. Missing the due dates can contribute a lot in low credit score. 3. In case your credit score has not yet generated due to no loaning history, you can apply for a zero annual fee Credit Card. It will help you build a credit score just by maintaining the monthly payments with no annual fee. Keep credit card balances low, as high outstanding can get you in trouble.