Once in a lifetime, one has undoubtedly come across the term “ Credit Score or CIBIL Score.’ Whenever we take any loan or apply for a credit card, the first and foremost thing taken into consideration is the credit score. A credit score typically denotes your ability to pay back the loan or credit card bill on time. But why does this even matter?
Well, there’s a sure-shot reason for everything, and so for the concern. In this technology-driven world, one can very easily check credit scores online. You can visit our official website and check your score very easily. Moving ahead, we’ll clear all your concerns and doubts related to your credit score in this article. So, buckle up and read this article till the end!
What is a credit score?
If an individual’s entire financial life could be boiled down to one number, it would be the credit score. It is a three-digit number that summarises your borrowing and repayment patterns. Creditors will view you as a competent borrower if your score is higher.
The creditworthiness of a consumer is predicted by their credit score, which ranges from 300 to 900. The better a borrower seems to potential lenders, the higher their score.
A credit score is based on a person’s credit history, including the number of open accounts, the total amount of loans taken so far, the history of repayment, and other factors. Lenders use credit scores to determine the likelihood that a borrower would make timely loan repayments.
What is a credit score range, and what does it mean?
In India, a credit score might be anything from 300 to 900. We always make an effort to get your credit score toward 900. Your chances of receiving a decent deal on personal loans and credit cards increase with a higher credit score. You will understand better after referring to the data below:
Who is responsible for computing the credit score?
Whenever you make a transaction, the bank sends your information to all four credit bureaus if they are important to determining your credit score. The RBI has mandated that information needs to be sent to each and every credit agency. In essence, banks inform Credit Information Companies about your spending patterns. Any of the bureaus can be contacted by a bank if they need to check an online credit score. It makes no difference which one you choose because they will all receive the same grade from you because they are all equally credible and equal in value.
Credit bureaus begin gathering additional data about your financial habits from other banks and financial organizations after receiving information from the bank. After processing this data, the credit bureaus generate the Credit Report.
What factors can have a bad impact on my credit score?
It is well known that carrying high credit card debt can significantly lower your credit score. In addition to that, there are a number of other things that can lower your credit score:
Being late on paying credit payments.
Completely neglecting your credit card or loan payments.
When credit card bills are not paid on time, creditors charge off accounts. One of the worst things that may happen to your credit score is having your account charged off.
Lenders use third-party debt collectors to retrieve the loan amount from you in case they do not receive payments. Receiving a collection account has a negative impact on your credit score.
Bankruptcy filings can significantly lower your credit score.
Your credit limit is reduced to zero when you ask to terminate a credit card that still owes any credit. This is comparable to when your credit card has reached its limit.
Your credit score will suffer if you just have one sort of credit account. Therefore, you should aim to maintain a balance between credit card debt and loans while consistently making on-time payments.
What are the benefits of having a credit score?
You can obtain loans and credit cards more quickly and easily if you have a strong credit score. Now check yours and understand the benefits of having a good credit score:
Get the Best Credit Card: Get the greatest credit card possible by improving your credit score. You can enjoy many benefits from having a card with lots of features.
Fast Loan Approval: Your loan application will move more quickly if your credit score is good. Your application might be swiftly and easily approved by banks.
Better Interest Rate: With the backing of a good Credit Score, you can bargain for a lower rate of interest on loans and Credit Cards.
Loans Made More Affordable: Processing fees and numerous other expenses are associated with loans. With a strong credit score, you may be able to negotiate your way out.
What is the best way to improve your credit score?
With various types and sources of credit scores, working toward good credit might feel overwhelming. But if you take a step back and concentrate on the fundamentals, you may easily raise your credit score.
A borrower’s credit score varies when information on their credit report is updated, and it may increase or decrease depending on the new data. The following are some approaches for consumers to raise their credit scores:
Pay your bills on time: When it comes to your credit score, paying all your bills on time is the single best thing you can do. It will surely improve your credit score.
Maintain minimal credit utilization: A wonderful approach to maintaining a strong credit score is to use credit cards frequently. Aim to use no more than 10% of your available credit, which is known as keeping your credit usage in the single digits. Additionally, if at all possible, pay the entire balance each month. This way, you won’t have to carry a balance and pay interest to establish good credit.
Increase your credit line: If you have credit card accounts, call and ask about an increase in your credit limit. You should be given a higher credit limit if your account is in good standing. However, it is important not to spend this amount so that you maintain a lower credit utilization rate.
How to check credit scores online?
Follow the steps below to check your credit score online:
Visit ReferLoan credit score page.
Enter your first and last name.
Add your mobile number and e-mail ID.
An OTP will be sent to your mobile number for verification.
Verify your age.
Now your credit score and report will be sent your number.
Bottom Line
Without a doubt, your credit score is a digit that can cost or save you a lot of money in your lifetime. A good credit score can land you lower interest rates, which means you will pay less for any line of credit you take out. But it’s up to you, to make sure that your credit remains strong so you can have access to more opportunities to borrow if you need to.
FAQs
The PAN card is necessary to appropriately calculate the person’s credit score. The credit score can also be obtained by using other valid Proof of Identity (PoI) in place of the PAN card. The PoI helps in identifying individuals in the database.
No, the inquiry won’t have an impact on your credit score. Your credit score may be slightly impacted when you apply for a loan or credit card, but not when you check your credit score.
The ability to check your credit score is not restricted. You are free to check your credit score as much as time you wish. The credit score inquiry is regarded as a soft check because only hard checks have the power to lower your credit score.
The credit score is influenced by changes to the credit report; if and when these changes are made, the credit score will change based on whether they have a positive or negative effect. For instance, your credit record and score will be impacted, when you apply for a credit card or loan and make payments on the credit.