What Is Good Cibil Score

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What Is Good Cibil Score

What Is Good Cibil Score

  • 12 December, 2022
  • By Admin: admin
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The term “Cibil Score” is one of the most commonly heard these days, and people advise others to maintain it. But what is a Cibil Score? And how do you maintain it? Why do we have to maintain it? What are the benefits of a good Cibil Score? These questions will be answered in this blog.

What is the Cibil Score?

CIBIL Score is a 3-digit numeric summary of your credit history, rating, and report, and ranges Between 300 to 900.

Full Form Of Cibil

Credit Information Bureau India Limited (CIBIL)

The Credit Information Bureau (India) Limited (CIBIL) is the most popular of the four credit information companies licensed by the Reserve Bank of India. There are three other companies also licensed by the RBI to function as credit information companies. They are Experian, Equifax, and Highmark. However, the most popular credit score in India is the CIBIL score.

What is a CIBIL Report or Credit Score?

A Credit Report is provided by existing four credit bureaus — TransUnion CIBIL (Credit Information Bureau of India Limited), Experian, Equifax, and CRIF High Mark. The most popular among these four bureaus is CIBIL. A CIBIL score is a 3-digit number that ranges between 300 and 900. The closer the score is to 900, the better it is.

The bank checks your credit score to determine your creditworthiness whenever you apply for a home loan. If you maintain a minimum CIBIL Score of 750 and above, it is generally considered good for loan approval. Avoid applying for multiple loans simultaneously, as every application sent to lenders may affect your credit score. Your credit report provides all the necessary information for financial institutions to analyze and offer home loans. You can download your free CIBIL credit report from Paisabazaar.com and can also get free monthly updates that will help you keep a tab on your credit score over time. 

Your current income and employment history are also important to banks. Banks just want to know you have steady employment and the monthly cash flow necessary to make your mortgage payments.

How to Improve your CIBIL Score for a Home Loan?

  • Pay your Dues on Time: You must ensure that you have not missed your current EMI or delayed your Credit Card payment.
  • Keep your Credit Utilization Ratio Low:  You can always request your bank to increase your credit card’s limit which will help you in keeping your credit utilization ratio low and eventually improve your credit score. You should also put a check on your credit usage to utilize as less credit as possible. Lower utilization of credit for long periods will show that you are capable of handling extra credit thus making it easier for you to get home loan approval.
  • Maintain a Healthy Credit Mix: To improve your CIBIL Score for a home loan it is advisable that you maintain a healthy credit mix i.e. having the right combination of secured and unsecured loans. Having too many unsecured loans can negatively impact your Score.
  • Check your Credit Report Frequently: One of the easiest ways to improve your CIBIL Score is to keep regular track of your credit report as it will eliminate the chances of any incorrect information being recorded in the report relating to your payments, EMIs are more.

Therefore, to enjoy the lifelong dream of your own home it’s always better to keep improving your credit history which shall eventually result in offering the best home loan for you and your family’s benefit.

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