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What Is CIBIL?
CIBIL or TransUnion CIBIL Limited is India’s oldest Credit Information Company (CIC). Since its inception is 2000, CIBIL (Credit Information Bureau Limited) has maintained credit reports of residents of India and generates their credit score.
What Is A CIBIL (Credit) Score?
CIBIL score is a three digit score that essentially determines your credit worthiness. This score lets lenders know how capable a person is of repaying the loan on time. A higher score is better and makes it easier to get loans and credit cards.
How To Check Your Credit Score For Free?
It is simple to check your credit score. Simply head onto the official website of CIBIl. You can know and check your credit score for free and get recommendations on which lender is best suited for you based on your credit score.
Why Does Your Credit Score Matter?
Credit scores help determine your credit worthiness. So, whenever you want a loan, your credit score plays an extremely important role in getting your loan approved. Your credit score matters when applying for the following:
- Credit Cards
- Home Loans
- Car Financing
- Refinancing Student Loans
- Any Kind Of Loan
How To Maintain A Good Credit Score?
Now that you understand why a good credit score is important, let’s dive into what factors that help maintain a good credit score.
The worse thing for your credit scores is late repayment of loans and EMI’s. Hence, ensure you have few outstanding loans and always repay them on time. Ensure credit cards have little or ideally no outstanding balance. If you do this over a long period of time, then will have a good credit score.
Multiple Loans And Credit Cards
Do not apply for many loans and credit cards simultaneously in order to extend the available credit. Doing so hurts your credit score. So, only apply for loans and credit cards when you really need them and ensure you repay them on time.
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A high amount of debt owed is also bad news for your credit score. So, in order to improve your credit score, make sure you don’t owe large sums of money and have a history of repaying your debts on time.
Many credit cards allow you to ‘revolve’ or transfer your outstanding debt onto other cards. While this will allow you to pay less interest, it will hurt your credit score in the long run. Also, once you get in the habit of taking more loans to repay old loans, it will be hard to stop. This will reflect poorly on your credit scores.
Closing Old Accounts
At first, it may seem like a good idea to close accounts. It isn’t. First, closing an account doesn’t make it go away. Second, banks think it’s a bad practice to close your accounts. Third, if you have old accounts and a history of good deb (debt you repaid on time), then leave it on your report. It works in your favor and helps improve your credit score.
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