CIBIL Score is the most significant factor to be analyzed for a loan application. The important factor is to understand how to calculate the free CIBIL Score. There is an exclusive algorithm that stipulates an individual's CIBIL Score calculation and the most crucial elements of the score composition is analyzed through an individual's loan payment behavior.
Undoubtedly, every credit agency has a unique way of calculating a credit score and makes use of various parameters while doing so. It is important to have precise knowledge and understanding of how you can calculate your free CIBIL Score regularly and basic information about your CIBIL Score to avoid any application cancellation letter.
What is CIBIL Score?
The CIBIL Score is usually a three-digit numeric summary based on your credit history. This can easily be derived using the Accounts and Enquiries section of your CIBIL report. The loan accounts, payment status, outstanding amounts, etc can be fetched reflecting the creditworthiness depending on the borrowing and repayment history as shared by the lenders. The range of the CIBIL Score list is from 300 to 900 wherein the higher the score the better the chances of a loan application being approved.
How Is Your CIBIL Score Calculated?
The CIBIL Score is calculated on four key factors which are listed below:
Payment History: Payment history is one of the most crucial factors that affect the CIBIL Score of an individual. If you pay your bills/loan EMIs consistently, it represents you as a responsible borrower while making late payments or missing payments lowers your score by various points.
Credit Mix: It is important to have a balanced mix between secured and unsecured loans. This further confides a positive impact on your credit history.
Multiple Inquiries: Making too many loan inquiries also harm your credit score. This is because it reflects that your loan burden is synced to go up in the future.
High Credit Utilization: A high credit utilization indicates higher chances of debt burden in the near future and impacts the credit score negatively.
What is the Ideal CIBIL Score You Should Have?
An ideal CIBIL Score is between 700 and 900. However, TransUnion has levied specific guidelines for managing your finances and credit score guidelines. A score of 772 is considered to be a good credit score. If your credit score falls between 700 and 750, which is also rendered as a "Good" it also means that you will receive loans and cards at a slightly higher rate.
How to Remove My Name From the CIBIL Defaulters’ List?
The primary thing to understand if your credit score has put you on the CIBIL defaulters list is that CIBIL does not maintain a defaulters list. However, to avoid any slightest chances and maintain a safe zone we should always take steps to enhance our credit score and keep the below-mentioned points in mind:
Regularly Keep a Check on Your Credit Report: Ensure you check your credit score regularly to keep a healthy track of your credit score. The reason is any errors or falls tracked on time can be rectified with time.
Pay off all Your Dues: Poor credit scores are the major reasons for delayed loan repayments. An off-settled credit report warns lenders against the debt obligations of the borrowers. Once all the outstanding bills are cleared, it is important to check the credit reports after three months to ensure the updated status is reflected on the platform.
Pay Your Bills on Time: Whenever you have taken a loan, it is equally important to pay it back as soon as possible either through EMIs i.e. a certain amount to the lender each month or all at once. Be informed that a single skip or delay or even a partial payment impacts your credit score.
Keep a Track of Your Expenses Within Your Credit Limit: To repair your credit score, it is important to pay down all credit amounts to keep the credit score more than 25% of its credit limit. Keep a note of not spending more than 50% off your credit limit as it reflects your financial inability and highly impacts your credit score.
Take One Loan At a Time: Do not apply for multiple loans at the same time as it displays your affluent indiscipline behavior towards credit management. Always apply for one loan at a time. This not only increases your chances of loan approvals but easier repayments.
How to Check CIBIL Score Online?
You can easily check your CIBIL Score online using your PAN number. Just make sure you enter your PAN Card number, name, and date of birth. The portal will then give the results of cibil score calculation on your screen.
How Do I Check My CIBIL Score By PAN Card?
Checking CIBIL Score by PAN card is quite easy. You just need to follow these steps to check your CIBIL Score:
Enter PAN Card number
Enter name and date of birth as per PAN Card
Enter details such as gender, email address, address, and mobile number
Conclusion
As you plan to achieve financial stability or want to stay ready for an emergency, you might need access to your credit card or similar options. It is important to keep a track of your CIBIL Score calculation to stay updated with your credit score and ensure you are credit ready. Start with the right set of knowledge and the right steps toward improving your score today.