In the present age, people count on loans and credit cards to fulfil their wants and meet their financial goals. Therefore, a CIBIL credit score check is crucial for getting financial or credit aid from banks and monetary loan providers. Since loans are vital for fulfilling various requirements, it becomes highly important to understand CIBIL credit score check and the factors that influence them.
What is CIBIL Credit Score Check?
CIBIL stands for Credit Information Bureau of India Limited. A person’s credit score provides a 3-digit number that is derived through an algorithm depending upon the credit history data of that person. People have been taking financial aid from multiple loan-providing companies, according to the credit score check of CIBIL, since 2001. However, RBI has granted credit information to three more companies, namely Experian, Equifax, and Highmark.
CIBIL has collaborated with Dun and Bradstreet, which is a global credit information provider, to extend its reach. Moreover, it has also joined hands with TransUnion International, an international credit bureau.
CIBIL Score Range And Its Creditworthiness
The credit score range of people determines their credibility in successfully paying the loan amount. Therefore, financial aid providers seek to know the credit score of people before granting them a loan. The following table demonstrates the CIBIL credit score check range and its creditworthiness:
| CIBIL Score Range | Creditworthiness | Approval Chances |
| Below 600 | Requires attention | Low |
| 600-649 | Doubtful | Difficult |
| 650-699 | Satisfactory | Possible |
| 700-749 | Good | Good |
| 750-900 | Excellent | Very good |
How is Your Credit Score Check Computed?
When you make a relevant and valuable purchase, the bank sends the details of your transaction to all the four credit bureaus, which includes CIBIL. The sending of the purchase details is mandatory according to RBI. Moreover, your bank keeps the credit information companies updated about your purchasing and monetary behaviours.
After receiving monetary details from your bank, CIBIL and other credit bureaus approach other banks to seek your monetary behaviour. Afterwards, the bureau officials process all the information to compute your credit score.
In case of your credit score check, a bank reaches out to any of the bureaus to seek details of your credit score. Moreover, all the bureaus provide the same credit score to banks. Therefore, it doesn’t matter which bureau the bank approaches and which one offers higher credit information.
Key Factors For Your Credit Score Check
There are certain factors that are considered crucial for your credit score check. A loan provider always looks for these factors before making a decision to offer financial aid. Therefore, as a loan seeker, it is vital to know these points to improve your chances of getting a loan.
- Account history: It consists of all the details of your credit accounts. Here is the information relating to the amount of the previous loan, lender’s name, type of loan, account opening date, account number, latest payment date, the current balance of the account, and up to 3 years’ monthly record of loan payment are included.
- Credit summary: In this section, the details of credit accounts and your credit score check of your previous and present accounts are included.
- Credit inquiries: It consists of occasions where a third party got the access to know your credit score check. Generally, when you apply for a financial loan, the lender checks your credit score to decide your credibility.
- Public records: This section lists major previous and present financial slipups like bankruptcies and criminal charges.
How to improve CIBIL Score?
Since your credit score check is crucial to seek monetary aid from financial institutions, it is necessary to have a high credit score and for that you should know how to improve CIBIL Score. The following factors play a vital role in having a good and convincing credit score:
- Pay all the dues on time.
- Keep your monetary balances low and avoid taking too many loans.
- Apply for a new loan in moderation with the previous one.
- Monitor your joint and co-signed bank account on a monthly basis.
- Keep checking your credit history frequently to point out any flaws.
Conclusion
Having a high credit score always leads to getting financial loans without much hassle. Moreover, it increases the confidence of people who desperately need monetary loans. However, it is necessary to know the factors that influence your credit score and work towards building an excellent score to increase your credibility.
