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Bad Credit? Know Your CIBIL Score & Learn How to Improve It

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Personal Loans

Credit score or CIBIL score is the reflection of any person’s credit history and is the first check that lenders do to check the creditability of any borrower. Most lenders require a good CIBIL score for Personal Loan since it shows how well the borrowers have managed their credit in the past. The credit score is generated by CIBIL which is one of the main credit bureaus in India. 

A credit score consists of a 3-digit numeric summary of your credit history. The numeric value ranges from 300 to 900. An excellent credit score comes in the range of 750 to 900. A good credit score comes in the range of 650 to 750. While credit scores ranging between 550 to 650 comes in the average category, one coming in the range of 300 to 500 comes under the poor category. 

So, if you are thinking of applying for a Personal Loan, but you are not aware of your credit score, then fret not! 

Here’s How You Can Check Your CIBIL Score:

CIBIL score is calculated based on a minimum of 6 months of historical financial data of any individual. 

To know your CIBIL score required for Personal Loan, you can visit the official website of CIBIL. 

Then you need to fill up the online form with your details such as name, address, date of birth (DOB), ID proof, past loan history, and some other relevant information. 

After that, CIBIL will send you an OTP to verify your details. Please note that CIBIL may also ask you to provide some more information to know more about you. 

CIBIL follows a robust authentication process. Be sure you have all the details of your different loans such as credit cards, car loans, home loans, etc. in handy. 

Upon successful verification, you will get your CIBIL score report for free. Also, do note that CIBIL gives you one CIBIL report for free once a calendar year. 

Apart from CIBIL’s official website, you can check a CIBIL score through various banks and financial institutions’ official websites for free. All you need to provide is your name, date of birth (DOB), PAN Card number, address, pin code, etc. to know your score.

However, just checking your CIBIL score is not enough to get fast personal loans online approval, maintaining a good credit score is also important. 

Here’s How You Can Improve Your Credit Score

If your credit score is poor and you want to improve it, then follow the below-mentioned tips:

  • Check Your Credit Report

In your head, you are assuming that you have a good credit score but there can be several unknown errors that might be taking a significant toll on your credit score. Let’s say you have repaid your loan completely, but it is still appearing as current due because of an administrative error. Likewise, you will have to keep an eye on other errors & suspicious activities that might be pulling down your credit score. Rectify these errors immediately to improve your credit score.

  • Limit Credit Utilization

Be sure that you don’t use your credit card for all transactions. Try to keep your credit utilization ratio at a minimum of 30%. When you follow this, you will notice a significant improvement in your credit score. 

  • Pay Your Bills on Time

Payment history is a major factor in your credit score, so it’s important to pay all your bills in full and on time.

  • Don’t Apply for Multiple Credits at Once

Every time you apply for credit, it results in a hard inquiry on your credit report, which can temporarily affect your credit score negatively. So, avoid applying for too much credit at once to reduce the number of hard inquiries on your credit report.

  • Use Credit Responsibly

In general, it’s a good idea to use credit responsibly, which means only borrowing what you can afford to pay back and paying off your balances in full each month if possible.

Final Words

By following these steps, you can improve your credit score over time and demonstrate to lenders that you are a responsible borrower. It’s worth noting that improving your credit score can take time, so it’s important to be patient and consistent in your efforts.

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