CIBIL score.. to take any loan.. to get a credit card.. it is mandatory for many other things in future. CIBIL score is the credit score provided by Credit Information Bureau (India) Ltd. But what is the significance of this CIBIL score? How much should it be? How is it calculated? Let’s find out.
Before you apply for any bank loan, banks ask you about your credit score/CIBIL score. Even if they want a credit card, someone will ask what their credit score is. If it is less then it will be difficult for you to get a loan. Even getting a credit card is difficult. The CIBIL score is more important. Even if the loan comes, the interest rates are high. The credit score provided by CIBIL (Credit Information Bureau of India Limited) is called CIBIL score. CIBIL score is calculated by considering many financial factors.
36 months credit profile of borrowers is considered for CIBIL score. This profile contains the history of home loans, credit cards, personal loans, auto mobile loans, overdraft and all types of loans. CIBIL score is calculated based on this credit history.
What Should Be Sybil’s Score?
Generally the CIBIL score is between 300 to 900. Between 750-900 is considered excellent. A score between 650-750 is considered good, a score between 550-650 is considered average, and a score between 300-550 is considered low.
Past History
Past payment history is the most influencing factor in CIBIL score calculation. For this, the credit bureaus take into account your monthly payment record for the last three years regarding your bills and EMIs.
Credit Utilization
The amount spent within the credit limit available to you on a credit card is called Credit Utilization Ratio (CUR). As far as possible it should be kept at 30-40 percent.
Credit mix: CIBIL score also depends on your loan portfolio. An unsecured loan affects the credit score more than a secured loan in terms of late payments.
Hard Enquiries: When banks or individuals apply for a loan they are called hard enquiries. That is why applying beyond the requirement will have a negative effect on the CIBIL score.
