Target a score of more than 750 to avail best loans from banks in India.
How is CIBIL Score calculated?
CIBIL score is calculated by various credit bureaus using their own proprietary algorithm, but the main elements of score composition revolve around loan and credit card repayment behavior of an individual.
You can calculate CIBIL score based on following factors:
Credit card utilization in the past.
Servicing of EMI’s of loans availed
Delay in loan repayment availed in the past. Recent defaults may affect your CIBIL score more than past ones.
Type of credit used (secured or unsecured), balance of credit mix and line of credit.
How to check CIBIL score in India?
CIBIL score is provided by CIBIL along with detailed Credit Information Report (CIR) on payment of Rs. 550 to CIBIL. From 1st January, 2017 you can ask CIBIL or any of the other bureaus, Experian, Equifax or Highmark to issue a copy of free credit report along with score without paying any charges. However, to simulate your CIBIL score based on your past credit history, use MyLoanCare Free CIBIL Score Calculator. You can also check CIBIL score free by using PAN card.
CIBIL Score details
CIBIL score is a composition of various factors and their contribution is as follows:
Payment history: Your past performance on debt obligation is the most important criteria and it is the major contributor in your CIBIL Score. About 30 percent of your CIBIL score reflects the record of past repayments.
Credit Type and Duration: The type of loan (secured or unsecured) availed in the past and duration of credit affects your CIBIL score. Type and duration of credit contributes about 25 percent to your CIBIL score.
Credit Exposure: Approximately 25 percent contribution in your CIBIL score is made by total credit exposure. High obligation as proportion to income will hurt this part of the CIBIL score.
Other Factors: Remaining 20 percent of your CIBIL score is contributed by factors such as credit behavior and credit utilization.
Why should you get your CIBIL score?
Ensure Accuracy: Your CIBIL report contains information of your credit history and track record of your loans. By assessing your CIBIL report annually you can ensure that the information reflected in the report is accurate. If you find any corrections in the report then you can address the problem on dispute resolution forum of CIBIL.
Keep an eye on your loan accounts: A CIBIL report is detailed summary of all your loan accounts and credit cards. CIBIL report helps you in monitoring your loans and credit cards. If your CIBIL report shows any loan that you have never availed, then you can easily address that problem on credit dispute resolution board.
Maintaining your credit health: CIBIL score reflects your credit position. It tells you about the debt owned and the outstanding amount of your loan accounts and credit cards. If your CIBIL report shows low CIBIL score than you must try to increase it to improve your credit position. Healthy credit position always helps you in getting better loan opportunities.
Individuals should keep assessing their CIBIL report and CIBIL score time to time in order to maintain a good CIBIL history. You should always go for the financial check up just like a health checkup to maintain financial stability.
CIBIL Score for personal loan
A high CIBIL score and a clean CIBIL report are one of the most important eligibility criteria for a personal loan from leading banks like HDFC Bank, SBI, Axis Bank, ICICI, Citibank and others.
What is a good CIBIL Score?
There is no good or bad score. Lenders tend to be little apprehensive granting loan to borrowers with score less than 700 for secured loans such as home loan. Banks in India tends to target customers with score more than 750 or above for unsecured loans like personal loan. Get an estimate impact of CIBIL score scale from 300 to 900 on your credit health.
CIBIL Score Range
What it may mean for your credit health?
750 - 900
CIBIL score between750-900 shows your exemplary credit history which will help you to get the loan with best market rates.
The score between this range shows your impeccable consistency in repayments made in the past.
With subject to credit report and eligibility, you will easily obtain home loan, car loan and other unsecured loans such as personal loans and credit cards.
700 - 750
CIBIL score in this range also shows a great track record of the past repayments but sometimes banks need to conduct further credit analysis depending upon the internal credit policies to judge your credit history more precisely.
550 - 700
CIBIL score in this range is considered low that reflects some of the irregularities in the past payments.
Banks may feel dicey to give you loan except exceptional credit check. There are some banks who may consider you for loans but with the higher collateral and interest rates.
300 - 550
Score in this range is considered poor that reflects your defaults such as write offs, past delinquencies and over leverage. You may face prime difficulty in obtaining the loan from any of the banks.
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