There are many different financial institutions that highly depend upon the steadiness of the CIBIL Credit Score of a person and judge their creditworthiness regarding on which the credit will be disbursed to the borrower. When it comes to the credit score, it generally varies from 300 to 900. In case you want to attain a score that is higher on the scale will indicate high chances of your loan application to become accepted. However, suppose you attain a low credit score. In that case, it will signify a poor history which will also include either getting delayed or even defaulting any of the credit repayments that are odds against the loan or credit card application of being accepted.
Why is a CIBIL Score or a Credit Score essential?
When it comes to a CIBIL credit score, it behaves like a parameter on which the credit institutions can easily inspect the borrower’s creditworthiness when they apply for a loan. It will not matter if the financial institution sanctions the loan or not, as it is only based upon the individual’s CIBIL score. However, if there is any individual who attains a high CIBIL score then it stands a great opportunity of availing an increased amount of loan with a longer tenure of repayment, obtaining better interest rates and also acquiring quick approval for the business loan.
The determinants of a CIBIL Credit Score:
There are factors that will determine the CIBIL score of any individual which are listed as below:
1. The Credit history of any borrowers:
When it comes to the credit history of the borrower, it is given the highest weight to determine their CIBIL score. It is based upon the behaviour of an individual when they are dealing with debt obligations that have to be taken care of. Suppose you are an individual that attains a history of delay or any defaults in debt payments. In that case, you will avail of a low CIBIL credit score. Likewise, suppose you are an individual that has always been careful enough to not have any defaulted on your debt repayments. In that case, your CIBIL score will be higher.
2. The credit mix and duration of the credit availed:
It depends upon the proportion to which an individual’s portfolio must include a secured and as well as unsecured loan that will help in determining your CIBIL score. However, Suppose the individual services are long term debt properly and with responsibility. In that case, it will be shall be ranked higher with the credit score.
3. The multiple loan applications:
It is each and every time that you are applying for a credit from any financial institution it is the concerned agency that will run an inquiry-based on your CIBIL report. However, if there are too many enquiries within a short period of time then it will impact on your CIBIL score negatively.
4. The credit utilization limit:
When you attain a high credit utilisation limit, it will not help with your CIBIL score. And it will be resulting in the failure of maintaining a low credit utilization limit as over the period of time, it will reflect on the borrower who cannot successfully mitigate with the credit burden.
5. The different factors:
There are various different factors like an increase in credit limit, not inspecting on the credit reports, by recent credit behaviours and also with the credit exposure of the individual it will help in contributing to determine the credit score of the borrower.
How can you inspect your CIBIL or credit score?
You can easily inspect your CIBIL credit score online for absolutely free at any time just by visiting the Shriram Finance website page. You can also create an account with the Shriram website just by inserting in your basic details like the username, password, email ID, and phone number. Once that is completed you can also verify your identity by punching in with your PAN Card and Aadhaar Card number. And, when all that is completed you will receive a one-time password on your smartphone. From that, you will have to enter online, and you will receive your CIBIL score report at that very moment.
Tips to enhance your CIBIL or credit score:
When it comes to CIBIL or credit score, if the score is ranked high, then your CIBIL score will be good enough for your loan applications, and it will be easily approved. And, when the borrower receives advantages like a lower interest rate, more authority for the negotiations, a high limits of approval and also availing exciting offers on the credit.
Here are some of the ways which will help you to employ for enhancing your CIBIL score as follows:
- You must not default on payments. You must also ensure to meet with the payments on time and also avoid credit repayment defaults.
- You can also lower the credit usage that will help you with your CIBIL score. The borrower should also minimise their credit usage by 50% of the limit.
- You must not apply for multiple loans within a short period of time
- You must always ensure that your credit portfolio has the right to credit mix. You should utilise a perfect proportion of a secured and unsecured loan and ensure the same.
- You must also ensure your credit report reflects a piece of accurate information.