Difference between CIBIL Score and Credit Score:
Before we explain what is a Cibil Score and how it affects your borrowing capacity with a bank or any other lending company. Let us first understand what is the difference between Cibil Score and Credit Score?
The Reserve Bank Of India (RBI )has authorised four Credit information companies in India to Check Credit Score in India and CIBIL is one of them. So, people often get confused with the terms. These four credit information companies (CIBIL, Equifax, Experian and High Mark) collect. And record all credit related activities of individuals. And based on certain criteria assign a particular Credit Score to an individual.
Check free Credit Score in India Each company give their own weightage or have their own criteria might give priority to a particular parameter. Hence your credit score might differ a bit if you check from separate Credit Information Companies. But you need not to worry as CIBIL Credit Score is accepted by all the banks or lenders in India.
What is a Credit Score?
Credit Score is a 3 digit number ranging between 300 – 900. And it is calculated on a lot of factors based on how well you have treated. Managed your credits or borrowings. whether you have paid your instalments on time or have defaulted any of them.
What is a good Credit Score?
A credit score of 750 is considered as a good credit score and most of your credit cards or loan approvals will be done. If you have a credit score above 750. If not you can still apply for a credit card as there are banks who offer credit cards with fixed deposit (FD).
It is important that you maintain a good credit score as checking your credit score. It is the first thing lenders do to see if you are eligible to apply for a credit card.
How can you improve your credit score or check your credit report?
There are few pointers you can keep in mind to improve your credit score
- Download your Credit Score Report to check for possible reasons. why particularly your credit score is low when you have been maintaining a decent repo with banks or lenders. As at times there are administrative errors which you might not even know. But might be affecting your credit score and hence it is important you get those resolved asap.
- You will always see a Due Date on all your bills whether its mobile phone bill, electricity bill, landline bill or internet bill. Make sure you pay before the due date not because it will cost you few extra bucks. As late payment charges but it affects your credit score as well.
- Make sure that you don’t utilize the complete credit card limit month on month it’s fine. That you do it once in 6 months but don’t make it a habit and try to keep your credit limit usage below 50 % every month.
- Be content with 2-3 credit cards ideally two is good, considering different benefits of each credit card and more importantly avoid. Applying for credit cards and loans too frequently. Avoid to be rejected from a credit card or loan application.
Meanwhile you can always check your complete Credit Score Report for free, here is the quick link.
We would be happy to hear your suggestions and answer questions related to credit score, feel free to comment.