What is your CIBIL score? You might be asked this question if you are applying for a loan or a credit card. If the term sounds unfamiliar to you, there is no need to worry. Here we give you a complete lowdown of all you need to know about CIBIL and credit score.

What is CIBIL?

CIBIL stands for Credit Bureau Information (India) Limited. It is one of the four important credit score information companies licensed by the Reserve Bank of India. The other three companies are Equifax, Experian and CFI Highmark.

However, CIBIL is the most popular credit score provider in India, maintaining credit files of millions of individuals and businesses. CIBIL India partnered with US-based TransUnion in 2000, and is now known as TransUnion CIBIL.

What is a CIBIL score?

It is a three-digit number ranging from 300 to 900 determining an individual’s credit history. If you have a score of 900 or closer to it, there are higher chances of your loan application getting approved.

Why is CIBIL score so important?

A CIBIL score is important for loan and credit card applications. If you have a high score closer to 900, it means you have a good financial track record and the lenders will have high confidence in extending credit to you.

Usually banks and other financial institutions prefer extending credit to individuals whose score is 750 or above. Such borrowers with a good credit score are less likely to default on payments.

What is a credit report?

A credit report is basically a detailed record of a borrower’s repayment of loans. It is a record from a number of sources which include banks, collection agencies, credit card companies and governments. A good credit report comes handy when applying for loans and credit cards.

How to improve your credit score?

The best way to improve credit score is to pay dues on time, keep credit balances low, apply for credit in moderation, review credit history throughout the year etc. If you own a credit card, make sure you pay your bills on time.

Leave a Reply

Your email address will not be published. Required fields are marked *