4 Sure ways to Score High on your CIBIL Report

Have you been recently thinking of purchasing a house, buying a new car, or trying to get funds for your new business? There are high chances that you may apply for a loan. The first thing that you would be asked for or would be seen is your credit score card that is your CIBIL Report. This is one of the foremost and the most important factor that would be considered while sanctioning your loan proposal. 

If you  have never seen a CIBIL report and don’t know much about it, read on…

Let’s have a look at your credit score card the ‘CIBIL Report’ .

 

Refer above infographic to get a quick overview of CIBIL Report

Elements of a CIBIL Report:

A CIBIL report is laid out in a format that tells your lender about following things:

1.       CIBIL SCORE: A 3 digit number showing your overall score

2.       EMPLOYMENT  INFORMATION: Summary of your all credit accounts

3.       ACCOUNTS: Details of your each credit account.  

4.       ENQUIRIES: Total enquiries made on you  for credit applications.

Let’s take a brief view of each section of a CIBIL Report.

1.       CIBIL SCORE: This is a 3 digit number that gives your overall score. This number ranges between 300 and 900, where 900 is the best you can score and 300 could be your worst score. A score of 900 would mean you are extremely creditworthy and have best chances of being looked favorably by a lender as far as your CIBIL score is concerned.  As your score moves lower your credit worthiness starts decreasing from a lenders perspective.  A score of 700 and above is a good score. A score anywhere below 650 would raise suspicion about your creditworthiness.

2.       EMPLOYMENT INFORMATION: This section gives a summary of all the credits/ loans you have taken till now from various credit institutions. The information in this section gives a snapshot of your credit accounts to the lender. The information here is your total number of credit accounts, total amount of your loan, the outstanding amount, total overdue amount (the amount which you haven’t paid on time),  loans you have closed and the latest loans you have taken.

3.       ACCOUNTS: This section is the most detailed section of a CIBIL report and delves deeper into your each credit account. It tells about your loan account number, date of opening the account, amount sanctioned, current outstanding amount, type of loan, ownership of the loan, and your payment history. This section nearly rips apart your complete credit behavior to the lender.  This is like the X-RAY of your credit behavior disclosing maximum details of your credit accounts.

4.       ENQUIRIES: This section tells the lender about the CIBIL enquiries made on you with the CIBIL authority. It gives the complete history of the enquires and details like, date of enquiry, enquiry purpose, enquiry amount etc. This tells the lender how many times and for what type of loans have your applied for previously.

After knowing this if you think that a CIBIL report exposes way too much about you, just consider the fact that you are actually utilizing hard earned money of many depositors as your credit.  

What affects my CIBIL score?

While scoring you, CIBIL weighs the following factors: credit mix, credit amount, payment history and enquiries for a credit. 

So you want to score well? It’s simple, just be diligent at few things. I am listing some of them: 

·     Think before you apply for a loan, do you really need it. Frequent loan applications show that you are a regular credit seeker.

·      Reflect before you act as a guarantor to someone (it reflects in your CIBIL report).

·      Pay your dues on time. Remember your are being watched with a microscope here.

      Maintain a healthy credit mix, which translates to lesser personal loans and credit cards. Secured and purposeful loans that are backed with a mortgage or a security are considered positive by lenders.

So have a healthy CIBIL score and stay creditworthy. This era demands you being more responsible towards your financial responsibilities. Credits and loans form a vital part of your financial plan.Seek credit only when you need it, because you would value it the most when you need it the most.