How To Improve CIBIL Score Immediately? | How Is Your CIBIL Score Calculated and Generated?

Nowadays people turn to have Credit Cards and loans to persist their holy desires and monetary aims. The cibil score is one of the momentous factors in getting the amount to access credit. This article will help you answer all the queries and to understand the matter of cibil Score.

What is cibil score?

A CIBIL Score is a consumer credit score. To put it simply, this is a three-digit numeric epitome of a consumer credit history and a counterpart of a person’s credit profile. That has thoroughly Emerged on preceding credit behaviors of a kind that, borrowing and pay-out habits, shared by the banks and lenders with CIBIL on a regular basis(the details of a Consumer’s cibil score and report. Including loan accounts or Credit Card records, outstanding amounts, and intervening space between the due date and payment date. Ranging from 300 to 900, the nearer a cibil score of 900 the greatest chance of getting premium credit cards (like; hdfc infinia credit card, or axis magnus credit card) and having approved loan applications.

What is the full form of cibil?

The clop CIBIL stands for the credit information bureau India limited. At the bottom, it’s a company that superintends credit records of diversified companies, firms and other individuals. On the basis of this the lenders disburse the number of loans and calculate the loans.

What is the difference between the cibil score and cibil report?

CIBIL report or credit report is an elaborated record of a person’s credit history based on personal information, contact details, employment information, loan account, credit card information, and inquiry information. On the flip side, credit score or cibil score is a three-digit numeric epitome of credit behavior, showing creditworthiness. This is based on one’s past credit history and payment deportments to recount future actions.

While the consumer cibil report/credit report comprises the last 36 months of credit history, CIBIL Score is based on the last 24 months of credit dealing Activities. Despite the difference between cibil score and cibil report, eventually, both CIBIL Score and Report are having a momentous Role in the approval of loan applications.

On the technical side, a consumer should have more than six months of credit history to access the cibil score. Regarding new-to-credit consumers as if they don’t have Credit Information or credit history to calculate cibil score, they may receive NH/NA (No history or Not Available). For the time being, they can build their credit embodiment with good repayment behaviour, good credit mix, and staying within their credit utilization limits.

How much cibil score is considered good? and why is cibil score important?

The credit score is not the only thing that a lender takes into account when evaluating your loan or credit card application but also their information benefits Ordinarily associated with a good cibil score.

  • Higher chances of approval of loan applications: A good cibil score acquaints responsible credit departments of a clean repayment history and a lower risk of default for the lender which typically enhances the chances of being approved for a personal loan.
  • Lower interest rates: A high credit score Builds a relatively lower rate of interest for availing credit such as personal unsecured loans, home loans, or credit cards.
  • Easier access to premium credit cards: Before approving a credit card application, one of the first things that lenders look after is reviewing the cibil score report of the applicant. Consequently, credit card companies become more willing to provide such applicants access to premium credit cards with better recompenses in the form of reward points, cashback, privileged services, etc.
  • Greater chance of approval for higher loan amount: A higher cibil score can also be causing chances of being approved for higher limits on loans and credit cards. This is because a high credit score usually reflects a lower risk of default owing to your responsible credit behaviour.
  • Possibility of approval for longer tenure loans: A longer tenure usually involves a higher degree of risk for the lender. However, a higher credit score may help you avail longer repayment tenure on your loan than a personal loan on low cibil score.

How to improve cibil score immediately?

It’s always a challenge to keep your personal cibil score high. One single demerit of payment, such as late payment of EMI, or multiple inquiries within a short period affects your credit score. However, despite all the endeavors in keeping credit score high, sometimes it flakes into unrestrained situations too. 

Therefore, in such situations, by making acquainted decisions and abating spending habits a bit, you can improve your credit score more swiftly. So, how can cibil score be improved?

  • Lowering credit utilization ratio: It is auspicious if a good credit utilization rate is maintained. For this case, the usage of the total available credit limit should be less than 30% of its.
  • Avoiding closure of older accounts: Older accounts reflect an image of consumers’ long-term association and connection with the lending Organisations, by which the credit bureau marks it a good score. This further helps in cibil score improvement.
  • Improving payment history: An improved payment history acts as the most vital part to increase cibil score. Monitoring of Credit Reports – Individuals need credit report check regularly (not constant) their credit reports to understand their creditworthiness and take steps to improve cibil Score indeed.
  • Multiple credits: The effect of having multiple loans, cards can bruise one’s credit score by making it lower. We should always avoid other debt instruments at once as it tends to depict a picture of one who is heavily dependent on credit. This deportment is instantly tracked by credit bureaus which further grows to a fall in the credit score.
  • Pay EMIs on time and pay the complete EMI amount: It is always an excellent idea to pay EMIs on time, this should be done on or before the due date. Otherwise, the rest of the amount payable will continue to accrue interest, which will further reduce your credit score. On the other hand, making regular on-time payments could help you to increase cibil score over a period of 1-2 years (depending on the tenure of the loan).
  • Pay off your outstanding on time:

Making credit card default is one of the worst habits of credit card users, not only can it hurt you financially with the huge credit card finance charge (normally 3.5% per month) but it can also affect your credit score severely.

Therefore it is advised to pay off your balance within the due date. If there is no way to make a full repayment, then at least pay the credit card minimum due amount and stop using your card until you clear off your outstandings. You can also convert your credit card outstanding to emi, it has a relatively low-interest rate and it makes repayment much easier for you.

So, as enumerated above, if the steps mentioned are followed diligently, there is no reason as to why an individual can’t increase cibil score from 650 to 750.

How cibil score is calculated and generated? 

One of India’s first credit information companies, credit information bureau (India) limited (CIBIL), collects and maintains the records of an individual’s and non-individuals (commercial entities) credit-related transactions such as loans and credit cards. These credit reports are provided by banks and other lenders every month to the Credit Bureau. Using the credit information report (CIR) transunion cibil and other credit bureaus calculate cibil score. Now every lender has its own reporting date which is mentioned below.

 

Bank name                     

Date of reporting                        

Amex Bill generation date
Axis Bank Month-end (30th or 31st)
BOB Month-end (30th or 31st)
CitiBank  Bill generation date
HDFC Month-end (30th or 31st)
HSBC Month-end (30th or 31st)
ICICI Bill generation date
Indusind Month-end (30th or 31st)
IDFC First Month-end (30th or 31st)
Kotak  Month-end (30th or 31st)
RBL Month-end (30th or 31st)
SBI Bill generation date
Standard Chartered  Month-end (30th or 31st)
Yes Bank Month-end (30th or 31st)

How to check my cibil score?

The cibil score check up process is simple, it can be done by following a few facile steps as mentioned below.

  • Log on to the cibil score official website, choose your desired cibil subscription plan and click on the Get started option.
  • Now fill up the required details, and then click on the Accept and Continue option. 
  • Now the payments page will open. Multiple modes of payment are available to choose such as debit card, credit card, net banking, etc. Rs. 470 has to be paid to get cibil score.
  • Once the payment is made, you will be taken to an authentication page where you will have to answer 5 required questions related to your past credit history, of which you will have to answer minimum 3 questions correctly to clarify your identity. Your CIBIL Report will be sent to the provided email address within 24 hours.

Now if you have a cibil subscription, then you can just log in to your account from the cibil score login page and check cibil score whenever you want.

However, there are also some free cibil score monitoring services available, fintech companies like; policybazaar, bank bazar, cred, and Paytm offer free cibil score checking services which can be equally useful.

Now you know how to check cibil score? and how to increase cibil score? What is stopping you from improving it? Keep your CIBIL score high with good financial practices and you will have access to the wonderful world of finance.

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