In today’s digital world, having financial knowledge has become crucial and understanding your creditworthiness is a major part of that. Your credit score is key to understanding your financial health and plays a significant part in securing loans and credit card applications approved. Thanks to the CIBIL score calculators, you can conveniently check your credit score and take steps to improve it before making an application.
Let’s explore and learn more about CIBIL, also known as the credit score, its importance, how often to check it, and some tips to maintain a healthy and good score.
What is a CIBIL Score?
A CIBIL score, also known as a credit score, is a three-digit number ranging from 300 to 900 used by lenders to determine a borrower’s creditworthiness. Having a good score (potentially more than 700) not only improves your chances of getting quick loan approvals but also offers low interest rates, better terms and conditions, and allows you to obtain credit cards with high limits and exclusive benefits.
Why Checking Your CIBIL Score is Important?
Keeping a check on your CIBIL score is essential because:
- Track Your Financial Health: Your credit score provides a quick snapshot of your financial health. A good score indicates that you are managing your finances successfully, and if you receive a bad score, you can take the time to review and improve it.
- Loan and Credit Card Eligibility: Loan providers use your score to evaluate your creditworthiness, and having a good credit score helps you secure loans at more favourable rates and with greater flexibility terms. A high score indicates that you can repay your loan or credit card EMIs quickly, making it easier for lenders to approve it on a quick basis.
- Identify Errors Early: Checking your CIBIL score regularly helps to identify the errors on an early basis and gives you time to rectify them. Improving the score can be achieved by taking the necessary steps, which increases your chances of securing quick loans in the future.
- Make Negotiations: Having a good credit score gives you the flexibility to negotiate with lenders for more favourable terms and conditions. You may secure a high loan amount at lower interest rates and favourable terms.
How Often to Check Your Score?
While there is no limit, experts suggest that you should consider checking your CIBIL score at least once every three months.
- Individuals must check their scores at least once every quarter, as this allows them time to rectify errors and improve their scores.
- Individuals who are actively applying for loans or credit cards should regularly check their credit scores and work to improve their low scores.
- Ensure to check your score at least a month before making a loan application, giving you enough time to take steps and improve it.
Many people think that frequent checking of the CIBIL score can negatively affect it. However, this is not true if you are making a soft enquiry and checking it by yourself. But, multiple hard enquiries can definitely lower the score.
Essential Tips to Maintain a Good Credit Score
Follow the tips below to improve your score:
- Pay all your credit card and loan EMIs in a timely manner.
- Avoid making too many loan or credit card applications in a short time period.
- Always keep your credit utilisation ratio less than 30% of the actual limit.
- Regularly review your CIBIL score and keep all the information up to date.
Conclusion
Your credit score defines your financial health, and it’s an important number used by lenders to assess your creditworthiness. Ensure you maintain a good credit score so that you can apply for credit cards and loans through trusted and reputable sites, such as Bajaj Finserv.
