What is CIBIL Score? How it Work?

Transunion Cibil Limited is the first credit information company in India, also commonly known as a credit bureau, we collect and maintain records of payments related to loans and credit cards of individuals and non-individuals (commercial bodies). These records are deposited with us by banks and other lenders on a monthly basis. Using this information, a credit information report (CIR) and a credit score are developed, due to which lenders evaluate and approve loan applications. Credit bureaus are licensed by the RBI and governed by the Credit Information Companies (Regulation) Act of 2005.

 

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Why is my credit score important to get my loan approval?

The CIBIL score plays an important role in the loan application process. After filling the application form and handing it over to the lender, the lender first checks the credit score and credit report of the applicant. If the credit score is low, the lender may not even consider the application further and reject it at the same time. If the credit score is high then the lender considers the application and considers other details to decide whether the application is eligible for credit or not. The credit score serves as a first impression for the lender, the higher the score, the better the chances of the loan being reviewed and approved. The decision to give a loan depends only on the lender and Cibil does not make any decision on whether the loan/credit card is approved or not.

 

How can I improve my credit score?

You can improve your credit score by maintaining a good credit history. This can be viewed positively by lenders and can be done with 6 simple rules:

1. Always pay your dues on time.
   Late payments are viewed negatively by debtors.
2. Always keep your balance low.
   It is not always appropriate to use too much credit, control your usage.
3. Maintain a healthy credit mix.
   It is better to keep a healthy combination of protected (eg home loans, auto loans) and unsecured loans (such as personal loans, credit cards). Too many unsecured loans can be viewed negatively.
4. Apply for new credits in a moderate way.
   You do not show credit as an excessive requirement, apply for new credit carefully.
5. Monitor your co-signer, guaranteed and joint accounts monthly.
   You are held equally responsible for wrong payments made in co-signer, guaranteed or jointly held accounts. Negligence of your co-holder (or guaranteed person) can affect your ability to get credit in your time of need.
6. Keep reviewing your credit history frequently throughout the year.
   To avoid unfortunate incidents like the rejection of loan application, buy your CIR from time to time.

 

What key factors affect my credit score?

1. Payment history.
   Paying late or having an error in your EMI or being in arrears (recent or frequent) shows that you are having trouble paying your current credit obligations and this negatively affects your score.
2. Excess use of credit limit.
   Increased spending on your credit card does not necessarily affect your score negatively, on the other hand, an increase in your credit card's current balance indicates an increased load to pay and negatively affects your score. Can do.
3. The higher the percentage of
   credit cards or personal (personal) loans (also known as unsecured loans) your score by keeping a balance between protected loans (such as auto, home loans, and unsecured loans (eg personal loans, credit cards) Is likely to have a more positive effect.
4. Recently opened many new accounts.
   If you have recently received the approval of various loans and credit cards, then the debtors will look at your application carefully as this conduct indicates that your debt load has increased, which will negatively affect your score.

 

Can CIBIL delete or change my records?
CIBIL cannot erase or change records that automatically reflect your CIR, we only collect records of individuals provided by our members (banks and financial institutions). There is also no list of 'good' and 'bad' credit or guilty persons.

 

What does it mean when my score is NA or NH?
Not applicable or NH score is not bad at all. It means one of the following:

• You have no credit history or your credit history is not enough to score, ie you are new to the credit system
• You have not done any credit activity in the last two years.
• You have all the add-on credit cards and have not been oriented for credit.

 

What is Cibil Transunion Score 2.0?
CIBIL TransUnion Score 2.0 is a new, updated version of the credit score, designed keeping in mind the current trends and changes in consumer profiles and credit data. Banks are gradually adopting the new version and you may find a difference in the new version as compared to the previous version (ie the score maybe 2–0 less than the previous version). Please note, the score currently available to you is the former version. However, the difference in credit score does not affect the credit decision during the loan approval process as both versions of the score may have different score eligibility cut-offs during the loan application process.

For example, if your bank previously approved loan/credit cards with a credit score of 800 and above, then if the new version is adopted then its score cut off may be lower.

The CIBIL Transunion Score 2.0 has also presented a risk index score for individuals who have a credit history of less than 6 months. These people had the last version

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