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The TransUnion CIBIL is one of the foremost credit information companies in India. It is responsible for CIBIL score calculation. Wondering what the CIBIL score is? Well, it is a 3-digit number that ranges from 300 to 900, and it indicates how creditworthy a borrower is.
Banks use your CIBIL score to determine your creditworthiness when you apply for a loan. But that’s not all. In recent years, employers are also starting to look at the CIBIL score as a measure of an applicant’s potential, and many landlords in premium residential communities may ask for your CIBIL score to determine the risk of default.
Clearly, a CIBIL score is important in many areas of life. But if you want more clarity on this number and on the CIBIL score calculation, here are ten crucial facts you need to know.
Your CIBIL Score is a Part of Your Credit Report
Your CIBIL score can be found in your credit report, which is a document that contains the details of your credit history. You can find information about the loans you have taken, your credit cards, your active credit options etc.
Different Factors Affect Cibil Score Calculation
Your CIBIL score calculation is done on the basis of different factors like your repayment history, your credit mix, your credit exposure, and the active credit enquiries made by lenders in the recent past.
Your CIBIL Score is Used in Many Ways
Your CIBIL score plays a major role in the loans you are eligible for. But apart from that, some employers and landlords may also want to refer to your credit score before entering into an agreement for employment or tenancy respectively.
Checking Your CIBIL Score is okay
Merely checking your CIBIL score online will not affect it. Only hard credit enquiries made by lenders or other parties from CIBIL, with your permission, will be recorded and used in your CIBIL score calculation.
Your Credit Information is Secure
Given the wide range of personal credit information used in your CIBIL score calculation, you may be worried about the confidentiality of this data. However, these details are secure and are only shared with authorised parties with prior permission from you.
Your Credit Report Cannot be Altered
Your credit report, which contains your CIBIL score, cannot be altered. No party can alter or make your changes to your credit-related information.
A low CIBIL Score Can be Improved
A low CIBIL score can be quite discouraging for aspiring borrowers. But it can be improved with timely repayments, having a good credit mix, and not using all of your credit limit. So, if your CIBIL score is low, you can improve it by paying your EMIs promptly.
Credit Cards Don’t Bring Down Your Credit Score
Credit cards often get a bad rap. However, merely having a credit card will not bring down your credit score. Only if you don’t pay your credit card bill on time will the score fall.
CIBIL Maintains Records for Everybody
CIBIL does not maintain records just for defaulters or people with a bad credit history. Everybody has their CIBIL score calculation done on the basis of the parameters mentioned above.
Your CIBIL Score Calculation can be Done Online
If you are not sure what your CIBIL score is, you can check it online for free. A score above 700 or 750 is generally considered to be a good one by lenders and other interested parties.
This should give you more clarity on what the CIBIL score is and how it is used. Now that you know these details, you can ensure that your score is within the acceptable range by being a responsible borrower.