Know How Your CIBIL Score is CalculatedPersonal LoansUpdated on Dec 26, 2019 View more like this | Visit India, UN | Contact Arwind Sharma |
CIBIL score plays an important role in availing a personal loan. It is one of the most significant criteria in determining your loan eligibility as it is an impression of your creditworthiness. The higher the CIBIL score, the higher are the chances of getting personal loan approval at better terms and conditions.
A CIBIL score is a three-digit numeric figure by CIBIL, a leading credit rating agency in India. It represents your credit history and signifies your ability to repay the loan to the lending institution. You can check CIBIL score without login. You can check and improve CIBIL score by identifying the factors that affect it and finding a solution to them.
The CIBIL score is being calculated based on the information available in the CIBIL report about the following factors:
An individual’s past performance on his debt obligations is the major criteria in his CIBIL score calculation. If you pay your credit card bills and existing loan instalments on time, you have a high CIBIL credit score. Delay in payment of credit card bills and loan instalments are reasons behind hampering your CIBIL score.
Credit Utilization Ratio is the percentage between your real expenditure and your credit limit. And reaching your credit card limit means that you always have to repay. A low credit utilization ratio has a constructive effect on your credit score and vice-versa. If you have a low CIBIL score due to credit usage, either lower your expenses on your credit card or get the credit limit increased.
Credit mix is the combination of secured loans and unsecured loans in your financial profile. If you have more secured loans, lenders believe that any asset is not free to keep as collateral against the loan. On the other hand, if you have higher unsecured loans, your debt liability is high, and this affects your credit score negatively. Thus, you should try to maintain a proper balance of both secured and unsecured credit.
Length of credit also has an impact on your credit score. If you have a debt which is pending for payment for a long time, it is harmful to your credit score.
Whenever you make a loan application, your credit score is being enquired. Too many enquiries about your CIBIL score affect it harmfully. It is the same with credit cards. A higher number of loan applications give a negative impression to the lender as it portrays the borrower as a credit hungry person. Hence, you should avoid making too many credit applications in a short period.
These are some of the major factors that are being considered while calculating your credit score. You can work on them to boost your CIBIL score. The importance of a good CIBIL score cannot be over-emphasized. You should always try to maintain a high CIBIL score for getting an instant personal loan in an emergency.
Bajaj Finserv brings to you pre-approved offers on its various financial products like personal loans, home loans and many more. It is to simplify the loan procedures to make it less time-consuming.
You can check your pre-approved loan offer by sharing some basic details like your name and mobile number. Get answers to your queries instantly related to online personal loan, anytime and anywhere Contact Bajaj Customer care number.
A CIBIL score is a three-digit numeric figure by CIBIL, a leading credit rating agency in India. It represents your credit history and signifies your ability to repay the loan to the lending institution. You can check CIBIL score without login. You can check and improve CIBIL score by identifying the factors that affect it and finding a solution to them.
Factors considered for calculating CIBIL score
The CIBIL score is being calculated based on the information available in the CIBIL report about the following factors:
Payment history
An individual’s past performance on his debt obligations is the major criteria in his CIBIL score calculation. If you pay your credit card bills and existing loan instalments on time, you have a high CIBIL credit score. Delay in payment of credit card bills and loan instalments are reasons behind hampering your CIBIL score.
Credit utilization ratio
Credit Utilization Ratio is the percentage between your real expenditure and your credit limit. And reaching your credit card limit means that you always have to repay. A low credit utilization ratio has a constructive effect on your credit score and vice-versa. If you have a low CIBIL score due to credit usage, either lower your expenses on your credit card or get the credit limit increased.
Credit mix
Credit mix is the combination of secured loans and unsecured loans in your financial profile. If you have more secured loans, lenders believe that any asset is not free to keep as collateral against the loan. On the other hand, if you have higher unsecured loans, your debt liability is high, and this affects your credit score negatively. Thus, you should try to maintain a proper balance of both secured and unsecured credit.
Duration of debt
Length of credit also has an impact on your credit score. If you have a debt which is pending for payment for a long time, it is harmful to your credit score.
Multiple loan applications/credit card enquiries
Whenever you make a loan application, your credit score is being enquired. Too many enquiries about your CIBIL score affect it harmfully. It is the same with credit cards. A higher number of loan applications give a negative impression to the lender as it portrays the borrower as a credit hungry person. Hence, you should avoid making too many credit applications in a short period.
These are some of the major factors that are being considered while calculating your credit score. You can work on them to boost your CIBIL score. The importance of a good CIBIL score cannot be over-emphasized. You should always try to maintain a high CIBIL score for getting an instant personal loan in an emergency.
Bajaj Finserv brings to you pre-approved offers on its various financial products like personal loans, home loans and many more. It is to simplify the loan procedures to make it less time-consuming.
You can check your pre-approved loan offer by sharing some basic details like your name and mobile number. Get answers to your queries instantly related to online personal loan, anytime and anywhere Contact Bajaj Customer care number.
