Why Does CIBIL Hold More Importance Than Other Credit Information Agencies?

In India, Credit Information Bureau of India Limited takes precedence over all other credit information agencies. The sole reason being that 85-90% of the banks have partnered with CIBIL as their members. Thus, a CIBIL score is widely accepted in India. That’s why there is more emphasis on maintaining a good CIBIL score. Every credit bureau has their own rating model. A CIBIL score ranges from 300-900, with 300 being the worst and 900 being the best.

What is Considered to be a Good CIBIL Score?

As stated above, CIBIL Score is a three digit number, which ranges between 300 to 900. Lower end of the spectrum represents the worst score, whereas, higher end, which is 900, represent the best score. Ideally, a score of 750 and above is considered to be a good score. If you reside in this bracket, getting lending products shouldn’t be a problem.

How can one Improve their CIBIL Score?

Increased Credit Limit: Ask your credit card bank to give you a higher credit limit. This does not mean that you can spend more. This is just to show Credit Bureau that you’ve kept your credit utilisation ratio low by spending less and servicing your debt at time. Seeing this, CIBIL restores confidence in you and increases your CIBIL score.

Dispute Settlement: CIBIL prepares the credit score report on the basis of the information collected from Member Banks. There can be a scope for errors cause humans are involved in the data entry process. If you find any transaction that you’re not sure about, you can raise a dispute on CIBIL’s website. By doing this, the damage done on your CIBIL website can be easily rectified.

Timely EMI payments: This is one of the ways that organically boosts your CIBIL score. All it takes is to be committed to get over the loan or credit card dues as soon as possible. Never bite more than you chew. Know your limit and spend accordingly so that you won’t face any difficulty in paying your monthly installments.

Why checking CIBIL Score should be on your Priority List?

Easier Credit Availability - In case of secured lending products (home loans), the need for credit score can be discounted because banks ask you to submit collateral against it. In the event of default, the banks can simply seize your collateral in order to recover the loan. This is not the case with unsecured loans (personal loans) and secured credit cards. Here, the bank grants you the loan on trust basis. The bank trusts you on the basis of your CIBIL score. In order to get loan approvals without any hassle, maintain a credit score of 750 and above.

Dispute Settlement: In case you have issues with some credit transactions or the scores assigned, you can always call for dispute settlement. Every credit information company has a dispute settlement wing who looks thoroughly into your complaint and makes changes accordingly.

Keep a Check: It helps you manage your finances by letting you check your credit track record in front of your eyes. You can spot where you are going wrong with your credit transactions. Once you’ve spotted these, you can improve these errors by making payments for the same.