A credit score is a numerical indicator of your creditworthiness. It helps lenders evaluate your repayment ability when availing any form of credit. Whether you apply for a new credit card or a personal loan, this score is critical to your approval process.
The score assigned by these four credit bureaus, licensed by the RBI, is considered valid in India. They include:
Lenders send your credit information to these bureaus, based on which your credit score is calculated. One of the most commonly used metrics by financial institutions across the country to measure your creditworthiness is the CIBIL score.
That said, an Equifax credit score is also widely accepted by lenders. Like a CIBIL report, the Equifax report also provides a detailed analysis of your credit history with a pictorial representation.
Read on to understand how to check your CIBIL score and the importance of maintaining a good score.
What Do You Mean by a CIBIL Score?
As mentioned, this is one of the most common criteria most lenders check when you apply for any form of credit. With TransUnion CIBIL having affiliations with most financial institutions in India, this is used as a widely accepted bureau to gauge an applicant’s creditworthiness.
Each time you apply for new credit, your CIBIL score for the last 6 months is checked. This numerical representation ranges between 300 and 900, and getting a high score can help you enjoy hassle-free loan approvals.
Check out the table given to help you understand the CIBIL score range and what each range indicates.
|CIBIL Score Range
|What Does it Imply
|This means you are new to credit with no existing credit history.
|This represents the ‘Poor’ category, implying you are a borrower with a high risk.
|This indicates ‘Fair,’ meaning that there have been repayment irregularities in the past.
|This represents the ‘Good’ category, implying you have shown responsible behaviour in clearing your dues.
|This is an ‘Excellent’ score, which means you have an exemplary credit history.
Getting credit may be difficult if you fall within the range of 500-649. However, some lenders may approve your application but offer a higher interest rate. If your score lies between 650 and 749, you can get credit easily, but the loan terms may not be favourable.
On the other hand, an excellent score of 750 or above implies that you are a trustworthy applicant, and that there is a negligible chance of you turning into a defaulter. This helps you negotiate loan terms that further help in decreasing your borrowing costs.
So, keeping a close tab on your credit score and working towards improving it is crucial if your CIBIL score is low. Best of all, you can track your score online and do these checks often. Learning how to check your CIBIL score is simple, and you can start by visiting the official CIBIL website or any lender’s portal to get the CIBIL score.
How to Check CIBIL Score Online: Different Steps Involved
Here is a step-by-step guide to check your CIBIL score for free at the official TransUnion website.
Then, you need to verify your identity by submitting an ID proof document based on the option you have chosen. That’s all, and you will receive your credit score in your email ID.
Note that if you already have a CIBIL account, you can log in using those details to check your score. Now that you know how to check your CIBIL score online, understand the importance of a good CIBIL score.
Benefits of Having an Optimal CIBIL Score
A CIBIL or an Equifax credit score, for that matter, functions as a scorecard indicating your financial integrity. This is a strong indicator, based on which lenders decide whether or not to approve your loan.
Here are some advantages you stand to enjoy when you have a good credit score:
Now that you have learned how to check your CIBIL score online and the perks of maintaining a good credit score, do all you can to have a high score. There are many ways to boost your score, and all require financial discipline.
Some of them include paying your debts on time, maintaining a diversified portfolio, clearing your outstanding without delay, monitoring your credit report regularly, etc. That said, it is your responsibility to maintain financial discipline and avail credit wisely.