Your credit score is a crucial element that assists in determining your financial credibility. Whether you’re applying for a loan, seeking a credit card, or looking for the best interest rate, credit score plays a vital role in all of it.
Credit scores developed from the evolution of the credit reporting system assisted lenders in checking the creditworthiness of individuals. Later, this system was advanced by data analysis and algorithms into a credit scoring model.
Nowadays, we all have heard of the CIBIL score, which has become synonymous with credit scores. Wondering how you can check your credit score? It’s very simple, and the best part is it doesn’t even cost you a penny, and by taking the correct measures, you can easily improve it.
What exactly is a Credit Score?
A credit score is a 3-digit number ranging between 300 and 900, provided by TransUnion CIBIL, CRIF High Mark, and Experian. It is a numerical summary of your credit history and repayment behaviors. It’s one of the most trusted credit scores and is commonly used in India by several financial institutions.
A score close to 900 represents strong creditworthiness, and below 650 may limit your financial options. A high credit score increases your chances of securing the best interest rate and effortlessly increases your credit power, which assists you in scoring a higher credit card limit.
Factors that affect your credit score:
- Payment History: Timely repayment of your credit card bills and loan EMIs has a significant positive impact on your credit score.
- Credit Utilisation: It is always better to utilize under 30% of your credit limit. Otherwise, it can impact your score negatively.
- Credit Age: A longer credit history has a huge positive impact on your Credit Score.
- New Inquiries: Applying for multiple credit inquiries, such as applying for loans at multiple banks and financial institutions, also negatively impacts your score.
How to check your CIBIL Score for free?
Thanks to multiple online tools and regulatory guidelines, checking your CIBIL score for free is very easy. Here are a few simple steps:
Step 1: Visit CIBIL’s Official Website
Open the official TransUnion CIBIL website. Look for the “Free CIBIL Score” option, which is notably visible on the homepage. Alternatively, you can click on this link – Get your Free CIBIL Score & Report instantly
Step 2: Create an Account or Log In
To obtain your free CIBILscore report, you’ll need to create an account. Provide necessary details such as your name, DOB (date of birth), PAN/ID number, and contact information.
Step 3: Complete the Identity Authentication
Complete the identity verification process by entering an OTP sent to your registered number or just answering a few credit-related questions.
Step 4: View Your CIBIL Score
Once authenticated, you can access your CIBIL score and credit report for free.
Did you know?
Many platforms provide insights into the factors that influence your credit score. Additionally, as a part of their services, numerous third-party platforms like banks and financial apps allow you to check your CIBIL score free of cost.
How can you improve your CIBIL Score?
Improving your CIBIL Score is not an overnight job; it requires financial discipline and consistency. Here are the tips to improve your CIBIL score:
- Always pay bills on time
Timely repayment of your loan EMIs and credit card bills is very essential. Even if you miss a single payment, it still highly affects your CIBIL Score.
- Avoid multiple credit applications
Applying to various financial and banking apps over a short period of time leads to hard inquiries, which negatively affect your CIBIL Score.
- Keep your credit utilization low
Always prefer to spend under 30% of your credit limit. Overspending and maxing out your card also negatively affects your score.
- Maintain a balanced credit mix
A healthy combination of unsecured loans (such as personal loans) and secured loans (such as home loans) shows financial stability and improves your score.
- Regularly monitor your credit reports
Tracking your CIBIL score regularly helps you keep a check on errors and discrepancies and also assists you in highlighting the factors that impact your CIBIL score.
- Wisely close unused accounts
Closing unused accounts is fine, but if you manage to keep them active wisely, it shows a long credit history and builds your creditworthiness.
Advantages of a High CIBIL Score
- Quick loan approvals
No more waiting in the queue with a good CIBIL Score. Financial institutions are likely to approve your loan request faster.
- Lower interest rate
A high CIBIL score can assist you in securing loans at comparative interest rates.
- Lucrative credit card offers
A high CIBIL score makes you eligible for premium credit cards with higher credit limits and exclusive perks.
- Build your power of negotiation
You can negotiate the terms with the lender if you have a good CIBIL score to prove your credit worth.
Your Credit score is a lot more than just a 3-digit number; it’s a reflection of your creditworthiness. Regularly checking your Credit Score for free keeps you informed about your status and also enables you to take proactive steps to improve it.
You can build and maintain an exceptional credit profile by adopting good financial habits like timely payments, low credit utilization, and regular monitoring. A strong CIBIL score can ensure financial advantages like securing the best interest rate on a loan, a high credit limit, and fast loan approvals.
Take a step today towards your better financial health by checking your CIBIL score regularly.
