How to Check your free Cibil Score to download credit Report?

How to Check your free Cibil Score to download credit Report?

What is CIBIL Score?

CIBIL score is one of the most important factors that almost every financial institution checks when they receive credit applications from individuals. A cibil score is a three-digit numeric summary that indicates the creditworthiness of an individual. A good score denotes not only your excellent financial discipline but also your integrity. Every time you apply for a loan or a credit card, your recent score (last six months) is checked. 

Credit Score is primarily based on credit report information about the payment history of an individual or commercial entity to check if you have paid earlier dues on time. Bank check your CIBIL Score before approving your loan. Credit Score helps banks and NBFC to determine the interest rate, credit limits and who to offer loans and credit cards. A credit score also helps to evaluate the credit risk of consumers and to mitigate losses due to bad debts.

The CIBIL credit score represents a summary of credit history and credit rating of an Individual in a three digit numeric summary (ranges between 300-900, with 900 being the best score).  Generally, a score above 750 is considered excellent when it comes to availing loans or credit cards. Individuals with no credit history will have a score of (-1). If the credit history is less than six months, the score will be zero (0).

 Who Computes the CIBIL Score?

TransUnion CIBIL, Experian, Equifax and Highmark are the commonly known credit bureaus or credit information companies in India, that collect and maintain the credit score of individuals and corporate entities. These companies compute the CIBIL score of individuals based on the consumer information stored in their repository. They are known for their accuracy and transparency in the calculation of the score.

What is Credit Information Report (CIR)?

CIBIL collects the borrowing and payment information from Banks and NBFC and issues Credit Information Report known as Credit Report. CIBIL report is a single unified document that contains credit history across different lenders over a significant period of time. It is a comprehensive report that provides details of an individual’s or corporate entity’s borrowing history and repayment record. The credit report includes the following information:

  • Personal details of an applicant (name, age, gender and address)
  • Employment details and earnings
  • Number of hard enquiries made by potential lenders on receipt of the loan/credit card application
  • Records of previous and current loans along with the payment record
  • Any defaults on loan
  • The details of settled loans, if any
  • Total credit limit and the amount spent monthly (Credit Utilisation Ratio)
  • Any credit card payment defaults
  • Credit Score

This report provides lenders detailed information of the applicant’s creditworthiness on the basis of previous and current credit behaviour. Based on the report,lenders take the lending decision.

How is CIBIL Report Generated?

Credit Information Bureau of India Limited (CIBIL), India’s first Credit Information Company, collects and maintains the records of individual’s and non-individual’s (commercial entities) credit related transactions such as loans and credit cards. These records are provided by banks and other lenders on a monthly basis to the Credit Bureau. Using this information a Credit Information Report (CIR) and Credit Score is developed. This enables the lenders to evaluate and approve loan applications based on the past record.

How to Download Cibil Report Online?

Step 1: Submit the online request form by providing your personal details and contact information, such as phone number and email id. 

Step 2: Click on Proceed to payment, a pop-up window will appear on screen, showing your CIBIL registration ID. Make a note of that. 

Step 3: Choose your mode of payment to download the report.You can choose either credit card, debit card or net banking. 

Step 4: Once your payment is confirmed, CIBIL will start your authentication process.

Note: The first question will be on the type of credit account you hold. Home loan, personal loan, auto loan, credit card. How you answer will decide your next question. Let’s suppose you have selected a credit card, see how it will go from there.

  • You will have to align your card issuer with your credit card number, whose last 4 digits will be displayed on screen.
  • On the next screen, you will have to answer whether, if you have applied for a loan or credit card in the past 12 months.

Step 5: Once your authentication is complete, you can download your cibil report online. The report will be emailed to you on your registered mail id. 

Note: To open the report, you will be asked for a password, which will be explained in the email. 

How is Credit Score Calculated?

The member banks and financial institutions monthly report the details related to credit activity of the customers to the bureaus. This includes data of each loan or credit card repayment made by the customer during the period and even the late or skipped payments. The report comprises new loan applications, interest rate, credit limit on card, the status of all loan accounts including those ‘written-off’ or ‘settled’ or ‘closed’. After the complex statistical analysis of the provided information credit score is calculated. If credit payment is done on time then the score is good. The candidates with high credit score have better chances of getting a loan or credit card.

 How to Check Credit Score?

Here is the procedure to check CIBIL score:

Step 1: Visit the official website of CIBIL (https://www.cibil.com/consumer) and click on Get Your Cibil Score Tab

Step 2: Select from the following subscription plans:

  • Premium 1 Year Subscription(Rs.1200)
  • Standard 6 Months Subscription (Rs.800)
  • Basic 1 Month Subscription (Rs.550)

Step 3: After selecting the subscription, enter your PAN, email address, date of birth and select your gender.

Step 3: Input the displayed characters in the given box.

Step 4: Tick on the box before ‘I acknowledge and accept the Terms and Conditions applicable and available on the site.

Step 5: Click on ‘Proceed to Payment.

What is a Good Score and Bad Score

CIBIL ScoreWhat It Means
850 – 900Shows that you have never defaulted even once and is an excellent score.
750 – 850It is a fact that 79% of loans sanctioned are for people with 750+ score. Scores above 800 are considered high and you can easily ask for a lower rate on personal loans and credit cards.
700 – 750A good score for secured loans. However, for unsecured credit, the bank might investigate further (like social score) or impose slightly higher rates.
500 – 700This shows that you have delayed or defaulted a few times in the past. Personal loans can be difficult to obtain from a bank. A private financier may levy hefty interest.
300 – 500Such poor score indicates too many discrepancies in past loan repayments to ignore. Unless you work on credit repair or improvements, it will be impossible for you to get a loan from any bank.

What is the Importance of CIBIL Credit Score?

A CIBIL score is like a scorecard for your financial integrity. It is an indicator, which tells a lender either ‘yes, you can give the loan’ or ‘no, it doesn’t look like he/she will repay on time’. The following are the reasons why you should always keep your CIBIL score high.

  • Importance of CIBIL Credit Score For Secured Loan Approval

There is a misconception that it is easy to avail secured finances such as home loans and auto loans, as you will be providing the lender with some security. However, your credit track record will still be looked into by the lender. This is how they decide on the upper limit and the interest rate. With a poor CIBIL score, the overall process can get complicated.

  • Importance of CIBIL Credit Score Quicker Approval of Unsecured Loans

A clean chit from TransUnion CIBIL, when it comes to credit score, is of the utmost significance when you apply for loans without any security. Like personal loans, for instance. For a borrower with a high CIBIL score (say 750+), it is easier to get it sanctioned. If your score is above 800, then you might even get a higher amount than generally given by a bank.

  • Importance of CIBIL Credit Score More Bargaining Power on Interest Rates

Are you aware of the fact that the interest rates vary for different loans at different banks? Some people end up getting a better deal than others. A higher CIBIL score enables you to bargain with banks for a better rate or deal. You can easily compare the offers from lenders and authoritatively negotiate as creditworthy customers are assets for any financial institution.

  • Importance of CIBIL Credit Score A Lesser Premium for Insurance

Insurance is another financial instrument that rides mainly on trust and credibility, whether it is life cover, medical insurance, or others. Your repayment history, claims history, and general handling of debts and dues – all these are tracked carefully by the insurance companies. This helps them determine if you can enjoy a lower premium compared to other policyholders with a low credit score.

  • Importance of CIBIL Credit Score Chance and Choice to Pick the Best Credit Card

Credit cards, if used smartly, can give you a host of benefits. Though they allow a definite zero-interest period, the interest rates can shoot up drastically when you delay or miss a payment. With a better-than-good CIBIL score, credit card companies will vie with one another to give you the best possible deal. Otherwise, you can end up with a credit card with a ridiculously high-interest rate or a rejection.

How to Improve Your Cibil Score?

  • Avail Your Recent Credit Report: This will help you in understanding the current position and where you slipped. For instance, if it is a couple of delayed payments responsible for your low score, then you need to ensure that it doesn’t happen again. It will also help you in correcting errors, if any, or set a target (it has to be at least six months).

Never Delay Payments: Procrastination is one of the harshest truths of our current world, with most of us falling prey to it. Delaying your bill payments, be it credit card or loan EMIs could see your score dipping, which makes timely payments a key role in maintaining a decent score. While a bank may be OK with ignore the first delayed payment, repeated delays could bring unwanted attention from their part.

  • Mix Your Credit:  A mix of secured and unsecured loans can reflect favourably on the score, with a varied portfolio preferred by most lending organisations. A skewed portfolio in favour of a particular type of loan (unsecured loan) could see your score taking a negative route.
  • Don’t Have Unused Credit Cards: It is never a good idea to keep one or more credit cards idle. If you are scared of maximising the limit, use it for grocery shopping or fuel purchase and repay it at the beginning of next month, and if you do not want to use a particular credit card, then close it.
  • Smart Handling of Debts: If you are handling debts smartly, then the score will improve. For instance, we all know how a credit card works on revolving credit and can get unmanageable if we are not careful. In such a case, closing off credit card dues with a personal loan is a smart move. This means you pay less interest and can solve a problem quickly.
  • Don’t Max Out Your Credit: In times where we want to enjoy things to the maximum, there is a high possibility for us to go overboard when it comes to our credit limit. Staying within the limit is bound to build your score, while exceeding it could come at a price. This shows lending agencies that you are not carried away and are a responsible individual who knows his/her limit.
  • Limit Your Cards/Loans: A quick look at our wallets will show that a number of us have more cards than we need. While a problem of plenty is good in a few cases, owning too many credit cards can have its own drawbacks. Not only does it complicate credit repayment, but it also pushes us to spend more than we need, leading to debt in our life.

Factors Affecting CIBIL Score

Repayment History: Banks and NBFCs consider a lousy credit track record as an indicator of future behaviour. Every time you avail loan or credit, the lender is duty-bound to report it to CIBIL. The bank takes note of whether you repay the debt on time. If you make an effort to repay in advance, then it is seen as a positive sign. This shows that you can be trusted to repay the amount you owe.

Credit Utilisation Ratio: Having a loan or multiple credit cards do not negatively impact your CIBIL score. However, if your credit utilisation ratio is high, it will bring your score down. Ideally, you should only spend up to 30% of your credit limit. A higher credit utilisation ratio suggests you have been increasing your debt and are likely to turn a defaulter. Therefore, it is advised to keep a tab on your credit expenses and make sure you are not maxing out your limit.

Type of Credit and Duration: The age of your credit history is the number of years that have passed since you opened your first credit account. CIBIL considers the average number of years for which you have been holding a credit account. Having a good balance of secured (car or home) loans as well as unsecured (credit card) loans helps to boost your score. When you have a healthy credit mix, it suggests that you have a good experience in handling different types of accounts. A long credit history with good repayment behaviour makes you a low-risk borrower. It is better to start building your credit history at an early stage as it will be helpful later at the time when you’re planning to buy a house or a car.

Numerous Existing Loans: Having too many loans in your name will always be a matter of concern to lenders – like a home loan, a couple of personal loans, a vehicle loan and credit card(s) on top of them. It is always better to close one before availing the next. Focus on closing the smaller loans as soon as possible.

Other Factors: Credit inquiries is another factor that is considered while calculating your score. Every time you apply for a loan or a credit card, the lender will check your credit report. This is called a hard inquiry. If you make multiple credit requests within a short period, it will bring your score down. Therefore, it is advised to spread your credit applications throughout the year instead of making them all at once.

Note: Building a CIBIL score is a slow process. You need to show consistent repayment behaviour and handle the available credit in a responsible manner to maintain a good score.

Frequently Asked Questions (FAQs)

Q.What to do if there is an error in the credit report?

A. If you notice an error in the credit report you can dispute the error on the CIBIL website. Errors in multiple fields can be disputed in a single dispute.

Q. How long does CIBIL take to resolve my dispute?

A. Upon submitting the dispute, it may take around 30 days for the organisation to resolve your dispute.

Q. Does the score change if I get my credit report from any other agency?

A. There are possibilities for the credit score to change if you get the report from other unauthorised credit report agencies. This is because the proprietary algorithm to generate the credit report may vary from agency to agency.

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