All about CIBIL Score

A CIBIL Score or credit score is a three-digit score ranging between 300 and 900. Your CIBIL Score is an important factor that lenders look at while evaluating your loan application. Therefore, it's important to know how the score is determined.

Your CIBIL score is important because it shows lenders if you are a dependable or a risky borrower. A good CIBIL Score is essential when applying for a loan. This score represents your ability to repay a loan.

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• Repayment history
  Your repayment history is a record of all your payments made to your lender, it includes on-time, late and missed payments. This information helps the lender understand if you are a safe or high-risk borrower. It is a good practice to repay on time and not miss any of your EMIs.
   
• Credit enquiries
  Every time you apply for a new loan or credit card, the lender raises an enquiry to check your credit information from a credit reporting agency like TransUnion CIBIL, CRIF, etc. Multiple credit inquiries in a short span of time have a negative impact on your credit score as it shows that you are credit-hungry.
   
• Length of credit history
  Length of credit history refers to the number months since the time you have been using a credit card or taken a loan. It also factors in the average age of all your credit and loan accounts.
   
• Credit card utilisation
  All credit cards come with a credit limit. Credit card utilisation refers to the amount of credit used against your credit card limit. Higher credit utilisation has a negative impact on your credit score since you are viewed as a high-risk borrower.
   
• Types of credit
  There are two types of credit - secured (Gold Loan, Home Loan, Auto Loan etc.) and unsecured (Personal Loan, Credit Card). Having a healthy credit mix is essential in maintaining a good credit score.

You can maintain your CIBIL Score by following some healthy credit behaviour such as:

• Monitoring your credit utilization ratio
• Paying your EMIs on time.
• Avoiding multiple or frequent enquiries
• Checking your credit report regularly
• Maintaining a healthy and long credit history

• Getting a mix of credit (secured and unsecured)

  
  

To help you monitor and track your financial health regularly, Bajaj Finserv has come out with a Credit Pulse Report. With this credit monitoring subscription, you can monitor the factors that impact your score, view your detailed credit report and unlock access to pre-approved loan and card offers.

In conclusion, maintaining a good CIBIL Score requires consistent and responsible credit behaviour. By paying EMIs on time, keeping credit utilisation low, avoiding frequent enquiries, and maintaining a healthy credit mix, you can strengthen your credit profile. Regular monitoring through tools like Bajaj Finserv Credit Pass can also help you stay informed, correct errors early, and improve your chances of loan approval.