Your credit score is a number that represents how good of a borrower you are. The Credit Information Bureau India Limited, popularly known as CIBIL, is the credit bureau that tracks your credit history to assign you a credit score.

Credit scores are extremely significant for anyone looking to borrow money in the future. Here is everything you need to know about credit scores - how to check credit score, what is a good credit score, how to maintain a good credit score and more.

What is a Credit score?

A credit score is a three digit number that signifies the creditworthiness of a borrower. It represents a borrower’s ability to repay the borrowed amount. The higher your credit score is, the more likely you are to get approved for a loan or a credit card.

How to Check Your Credit Score?

Checking your credit score is now easier than ever. Here is how to check credit score online:

1. Go to the official website of CIBIL
2. Click on ‘Get Your Free CIBIL Score’
3. Enter your details to get your free credit score report.

A quick credit score check can help you determine whether you are eligible for the loan or credit card of your choice.

What Are the Factors Affecting Your Credit Score?

Various factors affect your credit score.

1. Credit history

Your credit history reflects the timeliness of your EMI payments over the last 3 years. This includes all your EMIs of home loans, education loans, car loans etc.

2. Credit utilisation ratio

Your credit utilisation ratio is the percentage of the total credit available to you that you actually end up using.

3. Loan portfolio

Your loan portfolio and the number of secured versus unsecured loans are also taken into account while calculating your credit score. If you have been repaying a loan for a long duration, it also adds to your credit score.

What is the Importance of a Good Credit Score?

Having a good credit score can be very beneficial for potential borrowers. Here is how it can help:

1. Your loans get approved quickly.
2. You get approved for credit cards with better reward programs and privileges.
3. You can get higher credit limits on your credit cards.
4. You can get lower interest rates on your loans.

What is a Good Credit Score?

Your credit score can range from 300 to 900. A good credit score is usually considered to be anything above 750. However, a score of 600 or higher is also considered moderately good.

How to Improve Your Credit Score?

Here are some tips to improve your credit score:

1. Pay your EMIs on time.
2. Maintain a credit utilisation ratio of 30% or lower.
3. Close all your existing dues.
4. Create a balanced credit mix of secured and unsecured loans.

Conclusion

Maintaining a good credit score is crucial while applying for loans and credit cards. You can easily avail a free credit score check to be updated about your credit score.

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Frequently Asked Questions

1. How to check credit score?

You can simply check your credit score by visiting the official website of CIBIL.

2. What is a good credit score?

A score above 750 is considered to be a good credit score.

3. How to improve credit score?

You can improve your credit score by regularly paying your EMIs on time, having a credit utilisation ratio of less than 30% and paying off your existing debts.