Find out the ways on how to check credit score for free in India.
Are you thinking on how to check credit score for free in India? Then the information below is definitely for you.
With the various technology that we have today, you can easily check your Credit Score in India for free and online. You no longer have to go to the credit bureau and spend money just to know your credit score. There are numerous ways on how to check credit score for free in India. Get to know how you can check yours by reading the information below.
The first thing that you need to do is to fill up the information where the loan details are being asked. This will include all the loans, including persona, auto, home loans, credit card and even gold loans. Your outstanding balances from these loans will also be asked, and it is important to accurately fill the form up.
Personal Financial Information
Another thing that you need to give is the monthly salary that you are getting. You need to be as accurate as possible, and this should not include the tax that will be deducted to it. If you have EMIs that you are still paying, you also need to add this.
What is a credit score in India
Familiarize yourself with a credit scores in India by reading the information below.
CIBIL is India's credit information company, which collects and maintain all the information on an individual's credit card and loan. Find out more about credit score in India below.
Credit Score Range
The credit score ranges from 300 to 900, wherein the closer your score is to 900, the more confident the lending company is with you when it comes to granting you your loans. If your score is less than 750, most lending companies will see you as high risk, which can lessen your chances of getting approved.
Benefits of Having Good CIBIL
There are a lot of advantages of having good CIBIL, such as getting a higher amount of your loan, lower interest rate, and a fast approval of the loan. Some companies will also give you a longer repayment period, which means lower monthly dues for you.
How are credit scores calculated in India
In India, credit score is calculated by Credit Information Bureau of India Limited (CIBIL) which first started collecting borrower's information. It is also known as the CIBIL TransUnion score which is measured in a range of 300 to 900. Closest to 900 shows better creditworthiness and little probability of the creditor defaulting on his or her payments.
The CIBIL TransUnion score is based on five factors. First, is the applicant's repayment history which accounts for 35 % of the total score. Second is the credit balance which accounts for 30 % of the credit score in India. Followed by the amount of time for credit use which is responsible for 15 % of the rating on your CIBIL score. Final 10 % is for your overall credit mix.
The CIBIL score that is calculated using the weights mentioned above is responsible for approval, disapproval or the type of credit when you apply for loans in India.
Explanation of credit score ranges in India
A lot of people are wondering about the explanation of credit score ranges in India. Let's find out by reading the information below.
The credit score in India ranges from 300 to 900. The higher your score, the easier it is for credit companies to trust you. You can easily get a loan or a credit card without providing too many requirements.
A Good credit score
A good credit score ranges from 750 to 900 and most banks and financial institutions see people who have this score as low risk. This means that they are comfortable in approving credit card or loan applications to these people.
A Bad credit score
A bad credit score ranges from 300 to 749 and banks and financial institutions see people who have this score as high risk. They usually require more requirements before granting them their applications.
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You need to have an active credit card. Lenders are wary of borrowers that have zero or no credit history. You need to pay your bills and other credit payments on time. It shows on your credit report and eye catching for the lenders that look into your credit reports before giving approval to your loan application.
Avoid additional hard credit inquiries. A hard inquiry is one which involves financial institutions and banks requesting for your credit reports. Because ?hard inquiries' take off a few points, from your overall credit score or your FICO score.
Things you can do to improve your credit score
Having a bad credit score is similar to having poor health. Therefore, you need to take measures that ensure you are continually improving on it. The most efficient way of repairing bad credit is good management over time. Improving your credit score is necessary for you to be eligible for better terms and rates for loans in the future.
Regular credit report checks
You are advised to monitor your credit report regularly to see if it has any errors. A credit report brings you up to speed on your status as a debtor. Ensure that the payments are reported correctly and the amount owed to each creditor is correct. Errors must be disputed to your credit bureau promptly.
Reduce your debt
Most people usually take loans just because they are eligible for them without considering the potential damage to their credit score. For a start, you can reduce your reliance on credit cards. Design a plan that ensures you give priority to your debts that have the highest interest rates.
If your monthly premium is not automatically debited from your account, you need to set up a payment reminder. Timely credit repayment improves your credit score over time. Some financiers usually send emails or texts to their clients to make payments.