If you have ever applied for a personal loan or a credit card, then you might have heard the term CIBIL score or CIBIL TransUnion score. CIBIL is the leading credit score provider of the country. It works with the US-based company TransUnion and some of the country’s leading banks. A Cibil score range generally lasts from 300 and 900. Usually, a CIBIL score, which is more than 700, can quickly help you in the approval of a personal loan and credit card request. Anything which is less than 600 is considered very bad. So, several things are to be noted while checking the CIBIL score. Here is a comprehensive list of things that are pointed out through the CIBIL score:
Credit Leverage: One of the essential things that the credit score shows is credit leverage. Credit leverage shows how many credit cards you have availed, the type of credit mix you have, such as secured and unsecured loans and credit cards, the comparison of the secured and unsecured creditors as well as the total amount of credit that has been taken.
Credit Behaviour: Another essential aspect that a lender can understand from your credit report is the credit behavior of an individual. Credit behavior includes things such as whether you have been paying all your credit card bills on time or not, have you become a defaulter? If the answer is yes, then for how many days? It also shows how many times you have settled a credit card bill.
Credit Score is an essential thing today. So, there are several things that you should do if you want to maintain a good CIBIL score. Here are the factors in a glimpse:
Usage of credit: Usage of credit is responsible for almost 35% of the total credit score. The ideal rate is 30% of the full credit allotted to you. So if you have a credit card with a balance of 5,00,000 for the whole year, then it is advised that you don’t use more than 1,50,000 in the entire year.
Timely bill payment: Another critical aspect of a good credit score is the payment of the bills on time. So, if you are using a credit card, make sure that you are also paying the credit card bill at the right time as well.
Credit mix: You must make a healthy credit mix to have a better credit score. For example, if your revolving credit has a secured loan such as a home loan or a loan against property or maybe an unsecured loan and credit card, then it is likely that you will have a better credit score. But if you have more of the same kind of credit, then it is more likely that you will end up having a poor credit score.
Hard Queries: Queries are one of the most important factors is the query. For example, if you check your CIBIL score, then it will go down as a soft query. But if you apply for a loan or a credit card, then it goes down as a hard query. So, using for multiple loans will degrade your credit score.
Remember the fact that credit scores are of enormous importance when you apply for a personal loan or a credit card. So, maintain it wisely.