CIBIL Score is a numerical expression that predicts the likelihood of default of a person in the next 12 months. It is mainly influenced by your past repayment track record captured in your CIBIL report. This means, if you have made payments on time on all your loans on or before the due date, it is very likely that you have a good credit score, and hence banks look at you as a good customer.
Why is my CIBIL score important?
That’s not all. Your CIBIL score also has an important role to play if you happen to apply for certain jobs, especially in banking and finance sector, IT sector and other multinational companies as well. It has been found that those who are financially disciplined make diligent and disciplined employees in their workplace as well. Therefore, while performing a background check on you, your employer may ask you to submit your CIBIL report among other documents.
What determines my CIBIL score?
Your CIBIL score is based on the information in your CIBIL credit report. There are primarily five factors that go into the composition of your credit score. In order of their importance they are, your repayment history (35 per cent), utilisation of credit (30 per cent), average age of credit accounts (15 per cent), your mix of credit (10 per cent) and the number of inquiries that lenders make each time you apply for a new loan or a credit card (10 per cent).
To maintain a good CIBIL score, make all repayments of your loans and credit card outstanding on time, keep the balances on your credit cards low, keep the overall utilisation of credit below 30 per cent on your credit cards, have a healthy mix of secured and unsecured credit and finally apply for credit only when you are in dire need of it.
How can I access my CIBIL score?
Your CIBIL score is literally just a click away. You need to log on to the site and follow the simple instructions to procure your score. You will need to fill out your personal details, make a payment of Rs 470 and authenticate your identity on the CIBIL’s website. Once your authentication is complete, your CIBIL score will be sent to your email ID, the same day.
Does checking my own CIBIL score impact my score negatively?
No. When you request for your own credit report from CIBIL it is considered a “soft” inquiry as opposed to that of a lender’s inquiry which is considered a “hard” inquiry. Too many loans applied for in quick succession will lead to many hard inquiries which will then lead to negative impact on your CIBIL score.
How often should I access my CIBIL credit score?
As a prudent practice it is good to check your CIBIL score and CIBIL report at least once every year. If you haven’t done so, make sure you access your CIBIL score and report at least six months prior to applying for a new loan. This is to ensure that your CIBIL score is satisfactory and your CIBIL report is free of any discrepancies.
Now a days it is important to have a CIBIL score… if you want to borrow from any financial institution.
Keep a check on your financial health by accessing your CIBIL score periodically, as your income level is not as important as your attitude to handling credit, which your CIBIL score seeks to prove.
