What is CIBIL?
CIBIL stands for Credit Information Bureau, regulated by the Reserve Bank of India along with three other credit bureaus, compiles comprehensive reports detailing individuals’ and companies’ credit histories. It assigns a three-digit score (ranging from 300-900 for individuals and 0-100 for companies) that reflects creditworthiness.
Established as India’s oldest bureau, CIBIL partnered with TransUnion, a US-based company, in 2000, and is now known as TransUnion CIBIL. A higher CIBIL score facilitates easier loan approvals and better terms.
What is CIBIL Score?
A CIBIL score is a three-digit number that assesses an individual’s financial health and summarizes their credit history. Typically, a score above 700 is deemed good, facilitating smoother loan approvals without credit-related issues.
Various factors influence this score range. Simple habits like timely credit card repayments can significantly improve your score. Your CIBIL score plays a critical role in determining your eligibility for loans.
How to Improve CIBIL Score?
Following are a few basic points one can follow to improve the CIBIL Score:
- Timely Payments: Always pay your credit accounts on time to avoid negative impacts on your score. Consider setting up automatic payments.
- Low Credit Utilization: Aim to use no more than 30% of your credit limit to keep your credit utilization low.
- Credit Limit Increase: Request a higher credit limit from your lender and maintain disciplined spending habits.
- Limit Credit Applications: Minimize new credit applications, as each inquiry can temporarily lower your score and affect loan approval chances.
