A credit score, sometimes called a CIBIL score in India, is essentially any lender’s way of knowing if your’re a trustworthy borrower or not. There are a number of factors that go into the evaluation of this score, but it is largely based on your past record of paying back loans or credit card bills on time.
CIBIL, or TransUnion CIBIL Limited, to be exact, is a credit information company that maintains credit files on 600 million people and 32 million businesses. TransUnion is one of four credit bureaus in India and is part of TransUnion, an American multinational corporation.
Lenders in this case could refer to both banks and NBFCs (Non-Banking Financial Corporations). NBFCs are financial institutions that are regulated by the RBI, but are not banks. Meaning, they cannot store your money and offer you interest on it like the way banks do, but they can offer you other financial services like loans.
A CIBIL score is a three-digit number between 300 to 900. It summarises your credit history and scores you as per your credit behaviour.
You can follow these steps if you too want to check your CIBIL score using PAN:
You can check your CIBIL score for free using your PAN card only once a year. This is otherwise chargeable.
Check out this short video summarising the same: https://www.youtube.com/shorts/MDLAObGu4vI
Your CIBIL score is maintained and recorded by TransUnion CIBIL Limited. CIBIL stands for Credit Information Bureau India Limited. This is the first and the oldest credit-rating Indian company. CIBIL partnered with the U.S.-based company TransUnion in 2000, and since then, it has been called TransUnion CIBIL Limited.
In 2005, after the enactment of the Credit Information Companies Regulation Act (CICRA), three more Credit Information Companies (CICs) were established. These are:
A score close to 300 is considered bad, and a score above 650 is considered good. Your CIBIL score is formed with the help of these factors:
Your payment behaviour is the most important factor that impacts your CIBIL score. Paying your bills or EMIs on time has the greatest impact on your credit score. After all, this is the one thing that lenders need to know about you.
Having a credit utilisation ratio of less than 30% of your credit limit is important. So, as a general rule, if your credit card limit is ₹1 lakh, you should avoid spending more than ₹30,000 every month. Going over 30% now and then should be alright, but try not doing it too often.
Using more than 50% of your available credit limit will decrease your credit score.
Rolling over your credit card bill amount by just paying the minimum might lead you to a debt trap. It doesn’t stop there; as you accumulate credit month-on-month, your due amount is also compounded.
Any amount of uncleared debt after your repayment due date will bring down your credit score. This is because giving you credit would be considered risky if there is a chance of you making a default. That’s why you should permanently settle your outstanding debt on time.
Consider this situation. You have never had a credit card. Now you immediately want to get one with a higher limit at short notice. The chances of you getting a card here is low since you do not have a credit history.
Your credit history begins the moment you first open a credit account. If you are looking for more credit, you must have a long history to show your creditworthiness. The earlier you can start, the better.
Your CIBIL score or credit score is a lender’s way of determining if you’re someone worth lending money to. You can check your credit score on the CIBIL website or use the Fi Money app to check your credit score. Your credit score is largely determined by your past credit card bill payment history, and your credit utilization. On Fi Money, you can get a credit card that gives you 5X reward points on all your purchases, among other things. A credit card in general is a great tool to have, because of the extra room you get in terms of a credit limit that can cover you in times of emergencies. It’s also a great way to build your credit score and maintain it above 700. This makes lower interest loans and better credit cards more accessible.
Yes, PAN card is not necessary to check your CIBIL score online. You can check it even using your other IDs like voter ID, passport, or driving license.
You can check your CIBIl score directly on the CIBIL website. You'll need to enter your basic details and provide your ID proof like voter ID, passport or PAN card. You'll have to pay an upfront fee of ₹550, and you CIBIL score should be available to you in 3 business days.
Yes it is both okay and safe to check your CIBIL score online. Your sensitive information is encrypted and stored with the credit bureau. You are entitled to one free credit score check a year, and this should not affect your credit score as this will be considered a soft enquiry.
You can check your CIBIL score for free once a year. This is given to you by CIBIL - one of the 4 credit bureaus in India - once you provide your PAN and other basic details. You can get your CIBIL score for free on the CIBIL website.