The credit score is an essential factor that determines an individual’s creditworthiness. It is a three-digit numeric value ranging from 300 to 900, which is provided by the Credit Information Bureau (India) Limited, also known as TransUnion CIBIL, a regulated agency authorized to provide credit scores. Other credit bureaus in India include CRIF High Mark, Equifax, and Experian.
To obtain the credit score, it is highly recommended to apply through these authorized agencies as it is required when making loan applications. Once the score is received, the CIBIL report can be downloaded and analyzed for loan application planning.
It is crucial to understand the significance of the credit score and how to check it within two minutes. Therefore, individuals should ensure that they read and comprehend the necessary information related to the process. This will enable them to stay informed and aware of their creditworthiness, facilitating prompt and efficient decision-making concerning financial matters.
How does it all Work?
In India, the credit score ranges from 300 to 900, and it is categorized into different groups based on the score range. The categories include poor, fair, good, very good, and excellent.
A credit score between 300 and 599 is considered poor, indicating a high risk of default. Individuals with such scores may face difficulty in obtaining loans or credit, and if they do get approved, the interest rates may be higher.
A credit score between 600 and 649 is considered fair, implying that the individual may get approved for a loan or credit, but the interest rates may be slightly higher than those with a good score.
A credit score between 650 and 749 is considered good, indicating that the individual has a lower risk of default and can obtain loans or credit at reasonable interest rates.
A credit score between 750 and 799 is considered very good, implying that the individual has a good credit history, low risk of default, and can get loans or credit at attractive interest rates.
A credit score of 800 and above is considered excellent, indicating an exceptional credit history, very low risk of default, and the ability to get loans or credit at the most favorable interest rates.
It is essential to maintain a good credit score as it significantly impacts an individual’s ability to get loans or credit at attractive interest rates. Therefore, individuals should strive to keep their credit score in the good to excellent range to enjoy financial benefits.
Bad CIBIL score
- 550 and below.
- Unhealthy for the individual looking for a loan.
- Advise- adopt disciplined financial habits.
Poor CIBIL score
- 550 to 649 score.
- It indicates delayed repayment of the loan.
- Risky as it indicates the inability for repaying a loan on time or has a chance for the same ahead.
- Advise- repay previous amounts before new loan application.
Average CIBIL score
- 650 to 699 score.
- Neither bad nor good.
- One must improve credit history by making timely payments.
- One can get loan approval with a little high-interest rate and with a little fewer benefits.
- Advise- repay loans on time.
Good CIBIL score
- 700 to 749 score.
- Lower comfort in comparison to the excellent score.
- Improves loan approval multifold.
- Advise- Improve credit score and get an attractive rate of interest and hassle-free loan.
Excellent CIBIL score
- 750 to 900 score must be maintained.
- Indicates all repayment on time.
- Borrowers with better scores are low-risk borrowers who would pay the credit card bills and the loan EMIs promptly.
- Eligible for a best-interest loan, approved amount of loan, etc.
- Advice- maintain the score.
- The above-mentioned scores are bifurcations, they are just indicative, and they can vary.
CIBIL Score- How is it Calculated?
CIBIL, a leading credit bureau in India, is authorized to publish borrowers’ credit scores, which are regulated by the Department of Banking Operations and Development of the Reserve Bank of India. The credit score is determined by several factors that influence an individual’s creditworthiness.
One of the primary factors that affect the credit score is an individual’s repayment history. A good track record of timely repayments of loans and credit card bills can boost the credit score, while delayed or missed payments can negatively impact the credit score.
The second crucial factor is the credit utilization ratio, which is the percentage of available credit that an individual uses. A high credit utilization ratio can indicate that an individual is heavily reliant on credit and may be unable to manage their finances efficiently, which can lower the credit score.
The third factor is the credit mix, which is the combination of secured and unsecured loans that an individual has. A diverse credit mix, including both types of loans, can positively impact the credit score.
The fourth factor is the length of credit history, which reflects the individual’s creditworthiness based on their credit usage and repayment history over time. A longer credit history with a good repayment track record can result in a higher credit score.
Lastly, the number of credit inquiries made by an individual also affects the credit score. Multiple credit inquiries in a short period can indicate a credit-hungry behavior, which can lower the credit score.
several factors afect the credit score, including repayment history, credit utilization ratio, credit mix, length of credit history, and credit inquiries. Understanding and managing these factors can help individuals maintain a good credit score and obtain loans or credit at favorable interest rates.
- Credit/repayment category
- Utilization of credit
- Credit mix and the repayment duration
- Credit Inquiries
- Credit Utilisation Ratio or CUR
- Credit type and Tenure
- Deadlines being missed
- Many applications for the credit card
- Increased credit limit
- Credit inquiry
CIBIL Score- Importance
Having a good CIBIL score is essential for several reasons when applying for a loan or credit in India. Firstly, a high credit score increases the chances of loan approval and quick processing. Lenders often prioritize borrowers with good credit scores as they are perceived to be lower risk.
Secondly, a high CIBIL score can lead to more attractive interest rates, resulting in lower overall borrowing costs. Lenders offer lower interest rates to individuals with good credit scores as they are considered less likely to default on the loan.
Thirdly, a good credit score can help establish credibility and trustworthiness with lenders. A strong credit score demonstrates an individual’s ability to manage finances responsibly, and lenders are more willing to extend credit to such individuals.
Fourthly, a good credit score can provide access to higher credit limits. Individuals with high credit scores are often eligible for larger loan amounts and credit limits, giving them greater financial flexibility.
Finally, a good credit score can also impact other areas of life, such as renting a property or obtaining a mobile phone contract. Landlords and service providers often check an individual’s credit score before entering into a contract or agreement.
In summary, having a good credit score is crucial for accessing credit, obtaining lower interest rates, establishing trust with lenders, accessing higher credit limits, and even impacting other areas of life. Maintaining a good credit score requires responsible financial management and timely repayments of loans and credit card bills.
- Helps establish creditworthiness
- Faster credit or the loan approval
- Getting an attractive interest rate
- Access to the pre-approved loans based on the eligibility
- Higher limit on the credit cards
- Discount on the processing fees and the other charges.
Checking CIBIL Score- Aadhaar Card and PAN Card
To check your CIBIL score, you will need your PAN number as it is used by credit bureaus to identify and retrieve your credit records. It is also essential to ensure that the name and date of birth on the CIBIL report match those mentioned on your PAN card.
To check your CIBIL score, you can follow the steps mentioned on the Wishfin portal:
- Visit the official website of Wishfin and navigate to the ‘CIBIL Score’ page.
- Enter your PAN card number and click on the ‘Get Free Credit Score’ button.
- You will be redirected to a new page where you will be asked to fill in personal details such as name, date of birth, and contact information.
- Once you have filled in all the required details, click on the ‘Submit’ button.
- The system will verify your details and generate your CIBIL score along with the credit report.
It is important to note that you can only check your CIBIL score for free once a year, and any subsequent checks will attract a nominal fee. Checking your credit score regularly can help you keep track of your creditworthiness and identify any errors or discrepancies in your credit report.
checking your CIBIL score requires your PAN card number, and you can follow the simple steps mentioned on the Wishfin portal to obtain your score and credit report. Regularly monitoring your credit score can help you maintain good creditworthiness and take corrective measures, if necessary.
- Visit the portal or download the mobile app.
- Navigate the option of CIBIL score.
- Enter your PAN number and contact details.
- Provide your name and your birthdate as per your PAN card.
- Submit entered information for the score.
- When checking the CIBIL Score through the Aadhaar card, use the residence address mentioned on the card.
Checking CIBIL Score- WhatsApp
Checking your CIBIL score has become even more convenient with the introduction of WhatsApp services. You can now check your credit score on the popular instant messaging platform by following a few simple steps:
- Save the CIBIL WhatsApp number +91-8287151151 on your mobile phone.
- Open WhatsApp and send a message saying ‘Hi’ to the number.
- You will receive an automated response asking for your consent to proceed with the CIBIL score check.
- Reply ‘1’ to provide your consent.
- The system will ask you to provide your PAN card number, date of birth, and gender for verification purposes.
- Once the verification is complete, you will receive your CIBIL score and credit report.
It is important to note that this service is currently only available to those who have already obtained a credit report from CIBIL in the past. Also, the WhatsApp service is not free and will cost you a nominal fee.
You can now conveniently check your CIBIL score on WhatsApp by saving the CIBIL WhatsApp number and following the simple steps mentioned above. However, it is important to keep in mind that the service is not free and is currently only available to those who have previously obtained a credit report from CIBIL.
- Give a missed call at- 91-8286151151.
- You will receive a WhatsApp message through the number.
- Answer just a few questions like PAN number, contact details, and name, etc.
- Once done, you will receive the CIBIL score in the chat box.
Checking CIBIL Score Free
If you want to get your exact CIBIL score or an estimated score for free, you can do so by visiting the official CIBIL portal or downloading the CIBIL mobile app. You can also use third-party finance websites or your bank’s website to access your CIBIL score.
Here are the steps to check your CIBIL score:
- Visit the official CIBIL website or download the CIBIL mobile app.
- Register and create an account using your PAN card details and other personal information.
- Once you have created an account, log in to access your CIBIL score.
- If you are using a third-party finance website or your bank’s website, follow the instructions to access your CIBIL score.
It is important to note that while checking your CIBIL score is free once a year, obtaining your score more frequently will attract a nominal fee. It is also important to ensure that your personal information is accurate and up-to-date to avoid any discrepancies in your credit report.
Checking your CIBIL score can be done for free or for a nominal fee by visiting the official CIBIL portal or mobile app, using third-party finance websites, or your bank’s website. It is important to keep your personal information up-to-date and check your score regularly to maintain good creditworthiness.
CIBIL Official Portal
If choosing CIBIL’s official portal,
- Visit the website and select Your CIBIL Score.
- Provide name, contact details, date of birth, ID proof, etc.
- Provide the relevant information asked and then select, Accept, and Proceed.
- The one-time password will be received on the registered mobile number with the CIBIL.
- Enter the OTP on the screen and then click the option Continue.
- Then click the panel for checking the CIBIL score.
- You will be redirected, wherein you can continue with the member login option, and when you will log in to your account again, the CIBIL score will be available.
CIBIL Mobile App
If downloading a mobile app for score,
- Install the CIBIL app for the mobile phone.
- The complete registration process on the app.
- Log in to the account.
- Check CIBIL score.
It is important to note that when choosing third-party websites to check your CIBIL score, you should select a highly reliable and authenticated website. While some websites may offer free CIBIL score checks, it is important to ensure that the website is legitimate and not a fraudulent site.
Legitimate third-party websites may offer free CIBIL score checks as well as additional features such as credit monitoring, alerts for changes in your credit report, and personalized credit improvement advice. These websites may also allow you to check your score as many times as you want, unlike the official CIBIL website or mobile app, which limits the number of free checks per year.
Many banks in India offer the facility to check your CIBIL score as well as provide credit reports. Some banks may charge an additional fee for this service, while others offer it for free.
To check your CIBIL score through your bank, you typically need to log in to your online banking account and follow the instructions provided by the bank. Some banks may also provide the option to check your score through their mobile banking app.
It is important to note that while some banks may offer this service for free, others may charge a fee. Additionally, the frequency at which you can check your score may be limited by your bank.
Obtaining your credit report from your bank can provide valuable insights into your credit history and help you identify areas where you may need to improve your creditworthiness. However, it is important to review the terms and conditions of this service carefully to ensure that you understand any fees or limitations associated with the service.
many banks in India offer the option to check your CIBIL score and provide credit reports. While some banks may offer this service for free, others may charge a fee. It is important to review the terms and conditions of this service carefully and check your score regularly to maintain good creditworthiness.
It is highly advisable to regularly check your CIBIL score to avoid any financial liabilities that could impact your eligibility for credit. A good CIBIL score has multiple benefits, including the ability to get loan approvals at lower interest rates. Therefore, it is important to maintain a good credit score and take advantage of the benefits it provides. To check your CIBIL score, there are multiple options available to you. You can use the CIBIL website or mobile app, third-party websites, or check your score through your bank’s online banking or mobile app.
It is recommended to check your score every 6 months to ensure that you are aware of any changes to your creditworthiness. If you notice any errors on your credit report, it is important to report them to the concerned authorities immediately. These errors can impact your credit score and may lead to difficulties in obtaining credit in the future. By reporting errors, you can ensure that your credit report is accurate and up-to-date.