The Credit Information Bureau India Limited or famously known as CIBIL, one of the most favoured credit bureaus in India out of a total of six, is responsible for maintaining your credit records and deriving your creditworthiness on the basis of them. Your creditworthiness by CIBIL is denoted by a 3-digit credit score, aka CIBIL Score, ranging between 300-900. The more your score is closer to 900 the more lucrative credit options you will get.
The most painful truth about a credit score is that it’s very easy to deteriorate but takes a lot of hard work and patience to build. With easy credit options through android applications and the digital documentation process, users are much more vulnerable and easy to be fooled to get a loan. Some of the users lose their high credit ratings just after stepping into the financial world. Thus, we are here with these unique facts or benefits of CIBIL score to help you build yours.
Here Are The Unique Facts About Your CIBIL Score To Help You Build It Closer To 900:
Majorly Affected By Credit Utilisation
If you have a loan account you should probably focus on minimising your credit utilisation. Most people think that using their credit limit more and more and paying it on time will increase CIBIL rapidly. But both things: paying on time and using your max credit limit too often, are penned down in the CIBIL report. Paying on time makes it go up and utilising the credit limit at full capacity too often takes it down. As per the experts, an individual should not exceed using 30 per cent of their credit limit.
CIBIL Only Rates, Not Lists Out Defaulters
CIBIL, the most reliable credit bureau in India, is not liable to perform collections or list out the defaulters. This is the job of the associated lenders to issue the instalment alerts and to retrieve the amount from defaulters. CIBIL only maintains the credit records of an individual and scores their capacity to avail and complete a loan.
CIBIL Score Is Not Associated With Other Financial Accounts
CIBIL Score or Credit Score only denotes a person’s creditworthiness based on their previous credit history and present activities. CIBIL does not take FDs, stock market investments, bank balance and other financial accounts into consideration. Only the credit accounts like credit cards, different types of loans, BNPL, postpaid wallets and more are reported to CIBIL.
Credit Score Varies Among Credit Bureaus
A credit score of a person varies among different credit bureaus. This is because of the distinct calculation methodology of credit scores. Moreover, lenders report to the credit bureaus at different frequencies.
Also read:
Why My CIBIL Is Falling Even If I Am Paying On Time?
Only Hard Queries Affects CIBIL Score
Many people worry that their CIBIL score will deteriorate if they check it too often. This assumption is purely false. If you are checking your own CIBIL score then it’s noted under soft query and it does not harm your CIBIL. However, if you apply for a loan or credit card then the lender may request your info from CIBIL and this will be counted as a hard query in your CIBIL report.
