Article explains what is CIBIL Score, What are the things which impacts CIBIL Score, How much Score holds well and What to do to improve CIBIL score.

Most of the time we hear about CIBIL score. Many of the loan seekers face this issue while applying loan, that there CIBIL score is bad.

I am going to tell you that what to do if you face the same problem.

1. What is CIBIL Score?

CIBIL is an organisation which collects all credit related data from different sources and a system developed by CIBIL provide you a Credit score on the basis of such data. Score falls between  300 to 900.

2. What are the things which impacts CIBIL Score?

1) CREDIT – First factor is credit. Loan should be taken only when it is necessary. Never take loans for small value gadgets and unnecessary things.

3) Default in repayments of Loan – Default in repayments of loans is also badly impacts CIBIL Score.

4) Loan inquiries – once we submitted all documents and duly filled loan application to bank then it will be considered as on inquiry and updated with CIBIL data as one inquiry. More numbers of inquiries also badly impacts the CIBIL Score. Because it is treated like we are seeking for credit and not getting approved from one bank or in single inquiry.

5) Default in Loan Repayment in which you have given guarantee – Always aware about the loans in which you have given your guarantee. And also ask to third party about its timely repayment.

3. How much CIBIL Score holds well?

700 or more score is treated as Good score.

4. What to do to improve CIBIL score?

1) Get the CIBIL report and analyse it that where the problem is and why CIBIL score got down?

2) Repay Old dues and get “No Dues certificate” from respective bank.

3) Maintain Balance between Secured and Un-Secured Loans.

4) Do fewer inquiries from Banks for getting Loans. It is better to get CIBIL report analysis first, and then apply for Loan.

5) Repay your Loans’ installments timely.

5. What doesn’t impact CIBIL Score?

1) Dishonour of Cheque doesn’t impact Credit score because it has no relation with creditability of person.

2) Getting CIBIL report also doesn’t impact Credit score, only “written permitted inquiries with banks” impacts CIBIL score.

(Author can be reached at +91 7069035490)

Author Bio

Qualification: CA in Practice
Company: N/A
Location: KOTA, Rajasthan, IN
Member Since: 28 Mar 2019 | Total Posts: 1

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June 2021