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  • How Is Your CIBIL Score Calculated?

    CIBIL score is calculated by analyzing factors such as payment history, credit utilization, credit length, credit mix and recent credit inquiries. These elements are assigned specific weights, and their collective assessment determines an individual's creditworthiness. Maintaining a positive payment record and responsible credit management are crucial for a good CIBIL score.

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  • Your CIBIL score is made up of four factors and each of them have a weightage.

    Payment History 30%
    Credit Exposure 25%
    Credit Type and Duration/ 25%
    Other Factors 20%
    1. Payment History

      Payment history is one of the biggest factors that can affect your CIBIL score in a positive or a negative way. If you pay your outstanding bills associated with your credit cards and loan EMIs on time, it will boost your score. And if you delay payments or miss payments, it will reduce your score. Hence, such payment behaviour should be avoided to keep your score high. A CIBIL analysis reported by the Financial Express reveled that a 30-days delinquency can reduce your CIBIL score by 100 points.

    2. Credit Exposure

      Credit Exposure which is also known as the credit utilisaiton ratio is the second biggest factor that affects your CIBIL score. Credit utilisation ratio is the amount of credit used by you in proportion to your available credit limit. As per experts, you should ideally use up to 30% of your total credit card limit. A high credit utilisation ratio suggests you are credit hungry and are struggling with your finances. As a result of heavy credit usage on your credit cards, lenders could think that you are at a high risk of turning into a defaulter, leading to subsequent application rejection.

    3. Credit Type and Duration

      Having a long credit history suggests that you have experience in handling credit. Credit history refers to the number of years that have passed since you have opened your first credit account. Therefore, it is advised to start building credit history at an early stage as it comes in handy when you are planning to buy a house or a car in the future, requiring higher loan amounts.

      The type of credit is also considered while calculating your CIBIL score. It is important to maintain a healthy balance of secured (e.g. home/auto loan) loans as well as unsecured (e.g. credit card) loans. When you have secured as well as unsecured credit in your credit report, it suggests that you have good experience in handling both types of credit.

    4. Other Factors

      Another factor that is a part of your CIBIL score calculation is hard inquiries. When you apply for credit such as a loan or a credit card, lenders pull out your CIBIL report from the credit bureau. Such an inquiry is called a hard inquiry and multiple such inquires will have a negative effect on your score. You should avoid applying for multiple lines of credit at the same time.

    It should be noted that your CIBIL score is one of the factors considered by lenders while sanctioning your application. Therefore, you should take necessary measures to maintain a high credit score. At present, there are several lenders who offer preferential pricing to consumers who have a healthy CIBIL score. With a high score, you have the power to negotiate better deals on credit cards and request for lower interest rates for loans.

    What is the Ideal CIBIL Score you Should Have?

    CIBIL Score Range Meaning
    750 - 900
    • This shows that you have an exemplary credit history.
    • It is easier for you to get a home loan, personal loan, credit cards and other unsecured loans with a credit score within this range.
    • It also means that you have a consistency of frequent and timely repayments.
    700 - 750
    • If CIBIL score range is within 700-750, it means that you have a great track record of making repayments on time.
    • However, the banks will conduct some more credit analysis and this will be based on their internal credit policies.
    550 - 700
    • This would mean that you have a few irregularities with your past payments.
    • Banks may think that it is a little risky to give you a loan.
    • A few banks may consider you eligible for a loan but they will ask for a high collateral and interest rate.
    300 - 550
    • This means that you have a lot of defaults like past delinquencies, write offs, and also, over leverage. You will find it difficult to get a loan.

    Ideal CIBIL Score Rating For Different Types of Loans

    Loan Ideal CIBIL Score
    Personal loan Above 700
    Home Loan Above 650
    Loan against Property Above 650
    Car Loan Above 700
    Business Loan Above 700
    Gold Loan Not Required

    How to Remove my Name From CIBIL Defaulters’ List?

    Here are the steps to remove your name from CIBIL defaulter’s list:

    1. You should note that CIBIL will not publish a defaulters list.
    2. However, if you are a defaulter, then this will be reflected on your CIBIL score and also your report.
    3. A low score means that you will be less likely to get a loan approved from the banks and NBFCs. If a payment default or delayed payment has been marked in your report, then, this will affect your chances of getting a loan.

    How to Check CIBIL Score Online?

    Here are the steps to check the CIBIL Score online:

    1. Visit the official cibil website
    2. Select ‘Get Your Credit Score’. You can also click on ‘Check my CIBIL score’.
    3. Select your subscription product.
    4. Type in your identity proof details
    5. Select ‘Proceed to Payment’.
    6. Make payment for the same
    7. Your CIBIL report and your score will be sent to your email

    How do I Check CIBIL Score by PAN Card?

    The following are the steps to check CIBIL score using your PAN card:

    1. Visit the official CIBIL website
    2. Type in your PAN card details
    3. Select ‘Submit
    4. Select ‘Proceed to Payment’.
    5. Make payment for the same
    6. Your CIBIL report and your score will be sent to your email

    Improving Your CIBIL Score

    The following are the points that should be remembered to improve your CIBIL score:

    Use credit responsibly:

    • You have to repay the amount borrowed to your lender, with or without interest, depending on the type of credit line, and your repayment behaviour.
    • So, avoid borrowing more than you can afford to repay.
    • Use your credit card, loan amount, or any other type of borrowing wisely.

    Avoid late or missed payments:

    • Apart from being charged late payment fees, the repayment behaviour will also get reported to the credit bureaus, and this will affect your credit score.
    • If you have multiple credit card payments and loan EMIs to make, it is advised to set up payment reminders or due date alerts to get more organised.

    Maintain a low credit utilisation ratio:

    • You should not exceed 30% of your total credit card limit. This is especially important if you apply for a home loan.
    • When you apply for a home loan, banks will assess your debt-to-income (DTI) ratio. The ratio evaluates your total debt with respect to your total income. If your debt exceeds 50% of your income, banks are more likely to reject your application.

    Make sure to close accounts:

    • If you have defaulted on any payments in the past, it will be reflected in your credit history and will bring your CIBIL score down.
    • Make sure to pay off the unpaid amounts and close the account instead of opting for a settlement. You should ensure that the account gets a 'closed' status.

    Review your credit report:

    • You should check your credit report periodically to understand your credit health. This should be done to ensure that your credit report is free of any errors related to your credit accounts.
    • This is important because any incorrect information recorded on your report could bring down your score through no fault of yours.

    FAQs on CIBIL Score Calculation

    1. Is my credit score and my CIBIL score one and the same thing?
    2. Yes, your credit score and your CIBIL score are the same. The Credit Information Bureau (India) Limited was the very first credit bureau in the country and so, CIBIL score was a term that was used synonymously with the term, credit score.

    3. Does SBI have its own CIBIL score?
    4. SBI does not issue credit scores for its customers. The CIBIL is the credit bureau which collects information from and NBFCs about people and they then calculate the credit score.

    5. How can I check my CIBIL score online at no cost?
    6. If you want to check your CIBIL score with paying any money, you can search for cibil website on the internet. You should then fill in all details and once you submit this, you will be able to see your credit score.

    7. Will a loan rejection affect my CIBIL score?
    8. Yes, a loan rejection will lower your CIBIL score.

    9. Which one is a good score, 650 or 772?
    10. According to TransUnion CIBIL, a credit score of 650 is considered average, whereas 772 is considered a good score. Borrower will CIBIL score of 722 can avail themselves of cards or loan offers from the lenders at an affordable rate. While individuals with credit scores of 650 may not avail themselves of pre-approved card or loan offers depending on the lender as some lenders, such as banks or NBFCs may consider these borrowers as fresher.

    11. How frequently does your CIBIL score get calculated monthly or yearly?
    12. The record of an individual is submitted to the CIBIL by the lenders or the bank on a monthly basis. The CIBIL score and report is prepared using this record on a monthly basis that helps the lenders to decide whether to approve the loan or not.

    13. Can I check my CIBIL score myself without impacting my score?
    14. Yes, you can check your CIBIL score without impacting your score. Checking your score is considered as a soft enquiry that does not impact your CIBIL score negatively.

    15. How to calculate the CIBIL™ score for a personal loan?
    16. Calculating CIBIL score for easy approval of home loan is simple and effortless. Ensure that you have a CIBIL score ranging between 720 to 750, as any score lower than the minimum limit will lead to extra payout of interest to lenders as compensation for the risk borne by them.

    17. How to calculate the CIBIL™ score for a personal loan?
    18. Calculating CIBIL score for easy approval of home loan is simple and effortless. Ensure that you have a CIBIL score ranging between 720 to 750, as any score lower than the minimum limit will lead to extra payout of interest to lenders as compensation for the risk borne by them.

    19. How to calculate the CIBIL™ score for education loan?
    20. For approval of education loan, CIBIL score of 750 and above is considered good enough by the lenders. The CIBIL score of the parents is also considerable and in case of minor, the CIBIL score of the guarantor is considered as there is no credit activity of the minor.

    21. How to calculate the CIBIL™ score for a home loan?
    22. Credit agency of India, CIBIL, calculates the CIBIL score of the borrower and determines whether they are eligible for home loans. CIBIL considers various factors depending on which the CIBIL score is given which helps deciding whether the loan will be approved or not. For easy approval of home loan, CIBIL score of 750 and above is required.

    23. Does my credit score get affected by my salary?
    24. No, your credit score does not get affected by your salary.

    CIBIL Related Articles

    TransUnion CIBIL is one of the leading credit information companies in India. The company maintains one of the largest collections of consumer credit information in the world. CIBIL Score plays a key role in the lives of consumers. Banks and other lenders check the CIBIL Score of the applicants before approving their loan or credit card application. Consumers can visit the official website of CIBIL to check their CIBIL Score and Report. CHECK YOUR CIBIL SCORE now.

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