What is Cibil?
Cibil stands for Credit Information Bureau India Limited. It acts as a purposeful repository pool of information pooled in from all the banks and lending institutions operating in India. The main aim of cibil is to provide comprehensive credit information to its member credit granting institutions like banks, financial institutions, non banking financial institutions, housing finance companies and credit card companies. Cibil applies to both retail and commercial credit however in this blog I would like to just illustrate on what is a cibil score and suggest some tips on how we can improve our cibil scores.
A Cibil score is a three digit transunion score that is an indicative summary of one’s credit history as detailed in the credit information report (CIR) and ranges from 300 to 900 points. The cibil score is an indicative to the lender of how likely you are to repay a particular loaned amount. Currently it is believed that 90% of new loans sanctioned as based on the individuals cibil score, only if an individual is able to maintain a cibil score of 700 or higher is the loan taken ahead.
So now the million dollar question is how one improves one’s Cibil score, but if you were like how I was 2 month ago the billion dollar question how to know one’s Cibil score.
To get one’s cibil score one should go to the Credit Information Bureau of India (Cibil) website and pull out one’s credit report , it’s an online process it just a takes few clicks and is surely easy, having ones credit score is a good way of knowing how much do you have to improve to reach a desirable credit score. Okay now that you have got your Cibil score let’s understand what is a bad cibil score.
Let’s look at what’s tarnishing your credit; so that once the problem is identified it’s easier to chalk a suitable solution for the same. Pls note dear readers that improving one’s cibil score is dependent on several factors and one should make it a habit or rather inculcate a culture so that all are kept in check.
1) Are you habitual late payment maker? Or have a history of bad payments.
The above is considered to be among the single most reasons that people have bad credit, history as noted in my earlier blogs if you are a responsible person meaning someone who is in control of his finances and pays regularly then chances are you would also pay on time. Indulging in habitual late payment get noticed not just by the back but also by the credit monitoring authorities like CIBIL.
2) Large number of credit cards…
Life is all very real, with many youngsters drawing high salaries applying and procuring credit card/cards is technically very easy, but not all of us are very responsible maintaining it. An individual carrying a lot of credit cards literally means that he has an inclination of living life on credit, which is sparking a lot of negative factors.
3) High portion of unsecured credit.
Unsecured credit refers to credit which is being given by the lending authority without any secure collateral. High credit card bills and personal loans would come in this section, it is advisable to systematically minimize these are again negative indicators showing that the person is a grade high on un security and hence not that dependable on money related matters.
4) Being a ‘guarantor’ without giving a thought.
Do u know what does a guarantor mean, it means simply that you are a guarantee on behalf of the other individual, now if it was something like a marriage proposal you cannot be held legally responsible if the marriage turns sour, however guys when somebody asks you to be a guarantor for them, and if u sign, and the other individual suddenly vanishes, it does affect you legally by indicating that you are not a dependable person. I mean bird’s of a feather flock together, there is a reason why certain phrases are legendary!!!
Hope the above blog has been successful in tickling your mind and will help you refine and better your cibil score. Just like a financial statement speaks reams about you and your profile, likewise a cibil score speaks reams on about you!!!