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Cibil Score: Whenever you think of taking a loan from a bank or making a credit card, the first thing that is seen is your ‘CIBIL score’. This is not just a number, but a mirror of your economic credibility and honesty. A good CIBIL score helps you get loans on better terms, while a bad score can turn water on your financial possibilities.

What is CIBIL score?
Cibil Score is a three -digit number, which is a measure of a person’s credit history (loan repayment habits). It is generated by Credit Bureau like Credit Information Bureau (India) Limited. This score is between 300 and 900. 300 shows the lowest score, while 900 means the best credit history.

How much score is good?
Generally, the CIBIL score of 750 or more is considered very good. While staying in this range, banks and financial institutions trust you and you are able to get loans, credit cards or other financial facilities easily and at low interest rates. The score between 600 and 750 is also acceptable, but the score below 600 is considered poor and it makes it difficult to get loans.

Why is a good CIBIL score important?

1. Easy to get loan: Home loans, personal loans, car loans etc. are easily approved when they score a good CIBIL.

2. Low interest rates: Banks give loans to customers with good CIBIL score on low interest rates and better terms, which can make you a lot of savings in future.

3. Credit Card Approval: Getting a credit card from good credit score also becomes easy and you can avail better card options.

4. High loan amount: Banks often give you a large loan amount as per your need.

What do CIBIL score depend on?

Your CIBIL score is affected by many factors, which are prominent:

1. Payment History: This is the most important factor. Paying all EMI (monthly installment) and credit card bills on time strengthens your score. Delay in any payment or default has a very negative effect on the CIBIL score.

2. Credit Utilization: This means what percentage of your available credit limit. Experts recommend not using more than 30% credit limit. For example, if you have a credit limit of 1 lakh, do not use more than 30 thousand. The use of more credit reflects financial pressure.

3. How old is the credit account (Credit Age/History): How old your credit account is also matters. The older and systematic credit history, the better your score. Do not close old accounts, especially if they are well managed.

4. Credit Inquiries: When you apply for a loan or credit card, banks check your credit report. This is called ‘Hard Inquiry’. By making a lot of application again and again, your score can be reduced, as it shows that you are required repeatedly.

5. Credit Mix: It shows what kind of loan you eat – safe (eg home loan, car loan) or unsafe (eg personal loan, credit card). Maintaining a healthy mix is ​​considered good for your score, provided you can manage them properly.

How to improve and maintain your CIBIL score?

• Pay bill and eMIS on time: This is the first and important step. Choosing an auto-debit option can be beneficial.

• Use credit less: Do not use your credit limit more than 30%.

• Avoid applying for many credit: Do not apply for several loans or credit cards simultaneously.

• Keep the Credit Account on Puran: If you keep paying your old credit card, it strengthens your credit history.

• Check your credit report regularly: Check your CIBIL report at least once a year. In case of any mistake or fraud, get it fixed immediately.

In short, your CIBIL score is the basis of your financial credit. Creating and maintaining a good credit history is very important for your economic future. Focus on your financial habits and fulfill your financial aspirations by making a strong CIBIL score.