Your Credit Score: Whenever anyone goes to a financial institution and inquires about taking credit, the first thing they talk about is their credit report. The credit report, which includes the credit score, aids the lender in determining the reliability of the borrower. The lender uses this information to determine the terms of the credit, such as the interest rate and time allotted for repayment.
Moreover, the credit score also helps the lender know if the prospective borrower is actually eligible to borrow or not.
As per Investopedia, your credit score is based on your credit history, which includes information about the number of accounts you have, the total amount you owe, your payment history, and other aspects. Using your credit scores, lenders determine your credit worthiness, or the likelihood that you will repay loans on time.
The Credit Score:
The credit score is a 3-digit number ranging from 300 to 900, where a score of 900 is the highest or best one and any score near 300 is considered poor. The credit score is generated by CIBIL, which is India’s leading credit rating agency. The test conducted by CIBIL to know the credit score is done online, and CIBIL gets all the data from its monthly collection from various banks and non-banking financial companies (NBFCs).
Steps To Check Your Credit Score:
- Go to the official website of CIBIL and fill out all your details, including name, email, and PAN card.
- Answer the questions related to your credit history and defaults that are appearing on your screen honestly.
- Choose whether you want a paid subscription report, or if not, please click on “No Thanks.”
- At the final step, login to your dashboard, and when you submit, you will get your credit score.
Tips To Maintain Your Credit Score:
- Maintain your old credit cards.
- Take only one loan at a time.
- Check your CIBIL score regularly.
- Pay your EMIs on time.
- Stick to your credit utilisation ratio, that is, borrow only 30 percent of the credit limit that is assigned to you.
- Don’t make unrequired credit inquiries; every time you inquire about applying for a loan, your credit score is affected.