• January 29, 2023

CIBIL Score: What’s This, Why is it Important, and How to Improve the Score?

 CIBIL Score: What’s This, Why is it Important, and How to Improve the Score?

People considering applying for loans from a bank or any financial establishment must have a good CIBIL score for effortless approval and low-interest rates. A CIBIL score displays the loan history and credit discipline of a person. CIBIL scores are significant elements that banks and other financial establishments consider when they offer loans and credit card services to their customers. These numerical summaries of the credit history and repayment performance of people considering applying for a loan hold significant importance. Learn how to check CIBIL score online via the CIBIL score app or websites. 

What is CIBIL Score?

CIBIL Scores are numbers in three digits ranging from 300 to 900. It measures a person’s capability to repay the specific amount of money a person took as a loan. The higher the CIBIL score, the better it is for a person looking to apply for a loan. An apt CIBIL score is a score that varies from 750 to 900. A CIBIL score of more than 750 is regarded as a good score and proves that a person is a good borrower. Opportunities for loan approval become higher when the CIBIL score is more than 750. To get good access to credit cards and loans, a person should score near 900.

CIBIL scores enable banks and other financial establishments offering loans and credit card services to take a good look at the credit history of a person applying for a loan and check whether the person applying for a loan has repaid the previous debt. CIBIL scores display the number of loans a person has taken before applying for a new loan and the number of earlier loans. CIBIL scores aid banks and other financial establishments in decreasing default risks and financial loss reduction. 

How to Check CIBIL Score Online?

Individuals can check CIBIL score online. The steps through which people can check CIBIL score online are as follows:

  • Visit the official website of CIBIL.
  • Click on the ‘Get Your CIBIL Score’ option. 
  • Tap on the ‘Click Here’ option to obtain the year-end CIBIL score for free
  • In the box provided, people must write down their names, email addresses, and passwords.
  • In the next step, people must attach proof of identification like the permanent account number, passport number, voter card, or Aadhaar card identification number.
  • In the box provided, write down the postal number index code, contact details, and birthdate.
  • Tap on the “Select and Continue” option 
  • People will get a one-time password on their registered mobile number.
  • Write down the one-time password in the box provided and tap on continue.
  • Tap on the ‘Go to the Dashboard’ option
  • People will get redirected to the website myscore.cibil.com.
  • Tap on the member login option 
  • When people log into their account on the website, they can see their CIBIL score.

Why is CIBIL Score Important?

As mentioned earlier, CIBIL scores are a credit summary of a person’s credit history. CIBIL scores are significant to determine whether a person looking to apply for a loan can repay the amount of money a person has taken as a loan from any bank or any other financial establishment. A CIBIL report reveals the credit status of a person applying for a loan. Daily checking of the CIBIL report helps identify and rectify any inconsistency that resulted in a low CIBIL score without any fault of the person applying for a loan.

If the CIBIL score is good enough, banks and any financial establishment approve a loan. That is why CIBIL scores are significant. CIBIL scores make a person eligible for loans. CIBIL scores save the time of people who undergo a lot of paperwork to provide evidence of earlier credits. If CIBIL scores are not accessible, it becomes difficult for banks and other financial establishments to trust the creditworthiness of the person applying for a loan.

How to Improve CIBIL Scores?

Getting a good CIBIL score and maintaining it is necessary for loan and credit card application approval.

  • Timely Repayment of Credit Card Dues

Timely repaying credit card dues can help boost CIBIL scores. Timely payment of credit card dues will help prevent interest rates from getting higher and improve CIBIL scores. 

  • Diversification of Loan Portfolio

Diversification of the loan portfolio with a good blend of protected and unprotected debt to get a high CIBIL score is a good option. A loan is a protected debt. On the other hand, credit cards are unprotected debt.

  • Limit the Use of Credit Cards

People should keep the limit of their credit cards to 30% if they want to boost their CIBIL scores. If people are facing problems in staying within the current limit of credit cards, then it is advisable to obtain a credit card with a high limit.

Conclusion

Wishfin brings you a free service to check CIBIL scores online and view reports. Already checked your score? Using Wishfin Cibil Score App, you can access your detailed CIBIL Report. It’s time to structure your credit score improvement plan. Get an instant detailed CIBIL score report for free!

Robin Williams

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