Popularly known as CIBIL, the Credit Information Bureau (India) Ltd is an RBI authorised credit agency. It offers CIBIL scores and CIBIL reports for individuals.
This credit bureau considers an individual’s detailed credit information to generate a CIBIL score. CIBIL also provides credit report services to banks and other NBFCs.
A CIBIL score is a three-digit number that represents an individual’s creditworthiness. This credit score is in the range of 300-900, with 300 being the lowest. A CIBIL score closer to 900 is an indication of the individual’s good credit history and repayment behaviour.
How to check CIBIL Score online for FREE?
Steps to check your CIBIL score online for free:
- Visit https://www.cibil.com/freecibilscore.
- Click on ‘GET YOURS NOW’
- Fill out the form with the personal details such as name, mobile number, DOB, email ID, and identity proof ID.
- Click ‘Accept and Continue’
- You’ll receive an OTP to verify your details.
- Enter the OTP and receive your CIBIL Score and CIBIL report for free
That said, there are many other websites that provide you with the facility to check CIBIL score online for free.
How is CIBIL Score calculated?
CIBIL score is calculated on the basis of at least 6 months of historical financial data that revolves around the loan and credit card repayment behaviour of an individual. This financial data is fed into an algorithm that has 258 different variables (each with a different weightage).
These 6 key factors are considered while calculating the CIBIL score:
- Payment History– defaulting or missing your payments harms your CIBIL score.
- Debt to Income Ratio– your debts, such as credit card balances and loans, should consume less than 50% of your total income if you need to have a good score. A higher ratio pulls your credit score down.
- Credit Mix- your credit profile should have a balanced mix of secured and unsecured loans for it to have a positive effect on your CIBIL score.
- Credit Utilization– a high outstanding credit card balance indicates a high repayment burden, which can harm your CIBIL score.
- Multiple Enquiries– too many credit card or loan applications within a short span of time can imply your desperate need for money. This can affect your score adversely.
- Negative Status– bankruptcy, written-off loans, account in collection, etc. indicate your inability to handle finances. This can harm your credit score.
What is a Good CIBIL Score?
A score higher than 700 is a good CIBIL score. A good CIBIL score is an indication that you have been good with your repayments. Banks and financial institutions find you a worthy borrower with minimal risk of default. There are solid benefits of having a good credit score. Some of them are as follows:
- You can get good credit cards with better credit limits and deals.
- You have higher chances of getting approved for home loans, personal loans, or car loans.
- You get the power to negotiate for lower interest rates and better loan terms.
- You can bargain to do away with expenses associated with loans such as processing fees, etc.
Author Bio:
Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India’s first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics, so email him your questions at shiv@moneytap.com.
