Are you planning to apply for a loan or credit card but not sure if your creditworthiness meets the requirements? Well, the answer lies in your CIBIL score! Your CIBIL score is a reflection of your creditworthiness and can play a crucial role in getting your loan or credit card application approved. So, it’s important to know your CIBIL score before applying for any credit facility. In this section, we’ll guide you on how to check your CIBIL score rating and help you understand the significance of having a good score.
How To Check CIBIL Score?
To check your CIBIL score, you have two convenient options: visiting the official CIBIL website or using the Paytm mobile app. Here’s how you can access your credit score through the Paytm app:
- Log in to the Paytm mobile app using your credentials.
- Navigate to the ‘Loans and Credit Cards’ section, usually found in the main menu.
- Look for the option labeled ‘Free Credit Score’ and select it.
- The app will display your credit score without any charge, allowing you to assess your creditworthiness and financial health.
Remember, monitoring your CIBIL score periodically helps you stay informed about your creditworthiness and enables you to make informed decisions when applying for loans or credit cards.
What are the Factors Affecting the CIBIL Score?
Several factors can impact your CIBIL score, reflecting your creditworthiness and influencing your ability to obtain loans or credit cards. Understanding these factors is crucial for maintaining a healthy credit profile. Here are the key elements that can have a negative impact on your CIBIL score:
- Irregular payment history: Consistently missing or making late payments on loans or credit cards can lower your score.
- Delayed or outstanding credit balances: Carrying unpaid balances or having overdue payments on your credit accounts can negatively affect your score.
- Higher credit utilization ratio: Utilizing a significant portion of your available credit limit indicates increased reliance on credit and can impact your score negatively.
- Multiple hard inquiries: Making numerous credit applications within a short span of time can raise concerns about your creditworthiness and lower your score.
- Mismanagement of secured and unsecured loans: Defaulting on secured loans (e.g., home loans, car loans) or unsecured loans (e.g., personal loans, credit cards) can significantly impact your CIBIL score.
- Comments in the credit report: Negative remarks in your credit report, such as records of delinquencies or legal actions, can harm your score
How To Improve CIBIL Rating?
If your CIBIL rating is less than ideal, taking steps to improve it is crucial to increase your chances of loan approvals and favorable interest rates. Here are some fundamental practices to enhance your CIBIL rating:
- Make on-time credit payments: Ensure timely repayment of all your credit obligations, including loans and credit card bills.
- Pay off credit card balance in full: Avoid carrying balances on your credit cards and strive to pay off the entire amount each month.
- Maintain a healthy mix of secured and unsecured loans: Having a balanced portfolio of secured (e.g., home loan) and unsecured loans (e.g., personal loan) can positively impact your score.
- Limit hard inquiries: Minimize making multiple credit applications within a short period, as excessive hard inquiries can negatively impact your score.
- Utilize credit utilization ratio wisely: Aim to keep your credit utilization ratio (credit used divided by credit limit) below 30% to demonstrate responsible credit usage.
- Retain old credit accounts: Keeping your old credit accounts open and active, with a good repayment history, can contribute positively to your score.
- Repayment history
- Credit utilization ratio
- Duration for availing credit
- Credit mix
- Credit inquiries