Boost Your Savings With a CIBIL Score Check: Here’s How It Works
CIBIL score is the foundation on which your loan applications stand. To create an affirmative impact on loan providers, a good CIBIL score is a must. To achieve that, you have to understand the role of CIBIL and its impact on your overall financial freedom.
When used correctly, credit can become a lifesaver for many. It helps you manage your budget and plan your future spending efficiently. However, too much credit can negatively affect your ability to borrow a loan. So, here’s how you can check your CIBIL score to understand your credit score.
Understanding CIBIL Score
Credit Information Bureau, commonly known as CIBIL, is India's oldest credit rating agency. It stores your credit and repayment details through government authorization. Its main function is to analyze your credit information and repayment capacity to give you an overall score ranging from 300 to 900. The closer your score remains to the 900 mark, the more accountable you become to get a loan approved. This report is known as a Credit Information Report (CIR).
Steps for Checking Your CIBIL Score
Checking your CIBIL score is easy, and you can find many service providers on the Internet. It’s advisable to choose wisely, though, as there are many scammers out there. If you need a reliable service, Stashfin is a good option. It’s an online loan provider app that allows people to check their CIBIL score.
Check your score in just a few minutes with the following steps:
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Choose a plan that works for you.
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Register your Mobile number with OTP verification.
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Enter the required details, such as name, PAN number, PIN, date of birth, and more.
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Your score is ready to access
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Refresh every month to check your fresh report.
Here’s how to assess your CIBIL score:
300-499 Poor
500-649 Average
650-749 Good
750-900 Excellent
Keeping track of your credit information has become extremely easy with detailed reports. Avoid any delay and have an excellent score by assessing your CIBIL score every month.
Low CIBIL Score? Here’s What It Means
A CIBIL score check is meant to make debt an easy concept to grasp. It is a parameter through which your debt repayment capacity as a consumer is observed and analyzed by debt allocators. So, it is important to understand what makes your credit score low.
You can get a low CIBIL score on these grounds:
Late EMI payment or credit card dues: You can expect a low credit score if you exceed your deadlines on credit card payments and EMIs. Even if you improve the situation in the following months, the history of your loan behavior doesn't get erased, and it follows you around in the form of a low credit score. It takes around seven years to recover from the effect of a delayed payment completely.
Frequently applying for various loans: Are you trying to fit too much in your credit bag? Remember, it will succumb under pressure. Applying for various loans simultaneously leads to a negative impact before the allocation of loans.
Rejection from loan providers: Too many loan applications at the same time lead to rigorous credit screening, which leads to rejections. This may negatively affect your CIBIL score.
Unhealthy credit mix: A healthy credit mix of different credit products like personal loans and credit cards without indulging in just one type of credit product increases your chances of having a good credit mix.
Good CIBIL Score Can Result in Savings: Here’s How
A score above 700 is considered good in your CIBIL report. This helps you get the loan you need, and not only that, but it saves you money as well. Here are the ways you can save money with your credit score:
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Your CIBIL score affects the rate of interest on your loan. A high credit score entails a low interest rate, which helps you save tons of money.
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An outstanding CIBIL score gets you favorable loans from secured sources and helps you develop.
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Credit cards give you the best deals. If you maintain a score of 750 and above, your credit card will likely not take any annual fees from you. You also get exciting rewards for traveling and shopping.
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Maintaining a good CIBIL score makes you reasonable and aware of your spending habits, which leads to less credit baggage and decreased unnecessary spending.
Tips for Improving Your Credit Score
Improving your CIBIL isn't easy, but it can be accomplished with diligent efforts and thoughtful spending habits. These steps will help you get back to the ideal CIBIL score:
Pay your dues on time—Ensure you pay the pending amount in full and adhere to your due dates to maintain steady growth toward building a strong CIBIL score. Remember that consistency builds trust and a good score.
Say no to loans—It’s tempting to borrow for all major spending. But just like overeating, taking too many loans leads to bad credit score health. Avoid taking additional small loans and focus on the ones you already have. This will reduce your chances of rejection and an overall reduction in the CIBIL score.
30% CUR—Credit Utilisation Ratio (CUR) is the ratio indicating your dependence on credit. A CUR of 30% or less is advised to maintain a healthy relationship with credit.
Check your report: Your credit reports are generated in detail by service providers like Stashfin to help you understand your shortcomings when it comes to money. The report can also help you identify any unwarranted loans approved without your permission by fraudsters. Keep a check on your report to keep your wealth safe.
Conclusion
Your credit is not a liability. Instead, it can be an asset when used properly. Follow the basics and focus on the ‘give and take’ of money from your source of credit. You reap the benefits of a good credit score through rewards and lower interest rates. Read your CIBIL report properly and research the trends mentioned to develop a healthy relationship with your credit requirements. Remember, credit is a long run, not a short sprint, and there is no shortcut to becoming financially stable without balancing your credit usage.