What is the CIBIL Score?

Are you aware of the concept of having a “life score"? For every good thing you do, you get 5 points (or so), and for every mistake, you are deducted 5 points from your lot. How conscious would all of us be, right? Thankfully, that's not the case, but when it comes to our financial life, it is.

In today's digitised world, our financial activities are meticulously recorded and scrutinised. One of the key evaluators of our financial history is the CIBIL Score.

This score plays a significant role in determining our financial standing, as it tracks our financial transactions, investments, loans, and bank accounts. While the CIBIL score provides financial institutions with an overview of our financial stability, it's essential for us to have a comprehensive understanding of it.

That is what we are here to talk to you about!

Understanding CIBIL Score

Let's talk about what a CIBIL is and how it works. We know you are waiting to know your credit score for free, but first, it’s important that you know the basic gist of it.
 
A CIBIL score is a three-digit numeric of your credit history, credit report, and credit rating within India. This score is calculated by the Credit Information Bureau (India) Limited (CIBIL), which is known to be one of the biggest credit bureaus in India. This numeric could range from 300 to 900 (which will show where you stand when it comes to credit history). The higher your score is, the greater your creditworthiness.

A higher CIBIL would mean that you are most likely to repay your loans and credit card debts better, which makes you look much more attractive in the eyes of the lenders.

How to Know Your CIBIL Score?

There are just some simple steps to know what your CIBIL score is:

Step 1: Visit the CIBIL Website

You will have to go to the official portal, https://www.cibil.com.

Step 2: Register or Login

On this portal, if you are a first time user, you will have to register yourself. For the registration you need to provide your identity proof, and other documents to get started.

Once you have registered yourself, use the credentials you created to log in to the portal.

Step 3: Fill in the Required Details

You’ll be asked to fill in additional information like your address, loan details, and credit card details. This helps CIBIL accurately match your credit profile.

Step 4: Identity Verification

After you have given them your IDs, you need to verify that the information you provided is accurate by clicking on the checkbox.

Step 5: Choose a Subscription Plan

CIBIL offers various subscription plans as well as a free plan.

Step 6: View Your CIBIL Score

Once your ID has been verified, you can view your CIBIL score and credit report instantly on the screen. A detailed credit report would also be available which you can download.

Step 7: Via Third-Party Websites

You can also find your credit report through third-party websites and apps that offer free access to your CIBIL score. These platforms would ask for information similar to that of the CIBIL portal for their services.  

Step 8: By Contacting Your Bank

A lot of people do not know this yet; you can get your CIBIL score even through your bank's portal or by contacting your bank. Since they already have your details, it makes the process much more simpler.

How Does a CIBIL Score Work?

A CIBIL score works as a summary of your creditworthiness, reflecting your financial behaviour over time.

Let's understand the chronological order of your CIBIL.

1. First there is the collection of data. The bureau collects your credit information from banks, financial institutions, and credit card companies. These firms are also part of updating your credit information every once in a while.

2. Your repayment history of loans, EMIs and credit cards on time will make up to 35% of the score. Delays can come across as a negative in these cases.

3. How much of your credit you use up will come off as 30% of the time you spend making your CIBIL. The less credit you use, the better your CIBIL will look.

4. How long you have kept each credit account open can affect up to 15% of your score.

5. The number of applications and enquiries you have made regarding credit in recent times will make up to 10% of the score.

What is a Good CIBIL Score?

Let's interpret the credit score, shall we?

• 300-549: This is a poor credit score. You are considered high-risk, and it may be challenging to get loans or credit cards.
• 550-649: This is a fair credit score. Lenders may view you as a moderate risk, possibly resulting in higher interest rates or stricter terms.
• 650-749: This is a good credit score. You are likely to be approved for any loans or credit cards with favourable terms.
• 750-900: This is an excellent credit score. You are considered very low risk, and lenders are likely to offer you the best interest rates and terms.

Conclusion

You now know everything you technically need for a good CIBIL score. All that you would have to do now is concentrate on maintaining a healthy CIBIL score. We have also given you tips on doing that.

Just keep in mind one thing. All of us go through financial crunches once in a while; just don't let yourself make hasty decisions in the heat of the moment. Try to think around the clock and come up with the best possible solutions out there. This can help you in the long run and enhance your financial history, making it much better for the future ahead of you.