What Is A CIBIL Score? And How To Manage CIBIL score?

April 19, 2021

Whenever we apply for a loan, many of us would have got a reply from our loan executive that he has to check our CIBIL score.

What is a CIBIL score ?

Well, let me explain to you , it is a report card for your financial performance. Just like a progress card they give for your performance at school.

When more people started to do financial fraud and disappear without paying old loans and apply for a new loan at some other location. It became very difficult to recover loans and monitor these irregularities

In order to monitor these things a company named TransUnion CIBIL Limited formed a system where it keeps track of all your loan and financial transaction with the help of your PAN card. And financial institutions access these records to verify your financial behaviors before approving your loan.

Apply for a PAN card

CIBIL keeps a record of all your secured and unsecured loans you have acquired, and loans you have signed as a guarantor. CIBIL also keeps track of your loans that you have settled with the financial company because you could not repay.

Basically it keeps all your information about your borrowings.

CIBIL rates in a rage of 300-900 points. If you have 700 points and above are considered as a good score.

CIBIL score is considered for all your personal loans , home loans and vehicle loans.

When does your CIBIL score reduces ??

When you skip an EMI or deffer a loan repayment.
When you make a minimum payment on your credit card
When you sign as a guarantor for your friend or a relative and when they don’t pay back.
when you haven’t taken a loan ever, Yes !! if you haven’t taken a loan ever that also makes your score low and put you at high risk.