What Is A Free Credit Score And Why Do We Need CIBIL Reports?

A credit score, also known as a CIBIL score, is a three-digit figure that indicates how responsibly you have handled loans and credit in the past. Mainly, it’s a reflection of your borrowing capacity as determined by how you’ve handled credit in the past.

Your free cibil score is a number between 300 and 850 that indicates to lenders whether you are a safe or risky borrower and how likely you are to responsibly repay any new loans you may receive. Your credit score and credit history are kept in your credit report, which is reviewed thoroughly by the lending bank or NBFC when you apply for a loan or credit card.

The range for a credit score is from 300 to 900. A higher credit score increases your chances of being granted new credit. Lenders favor applicants with credit scores of 750 and above when applying for any type of loan or credit card.

Defaulting on loan or credit card payments on a regular basis might have a negative effect on your credit score. But if you’ve been on time with your credit card and installment loan payments and haven’t shown signs of being “credit hungry,” your score should be fine.

Why do you need a CIBIL report?

TransUnion CIBIL is also known as the Credit Information Bureau of India Limited. It is crucial to the functioning of the Indian economy. In order to determine a person’s eligibility for a loan, the company collects data and uses it to generate a CIBIL credit score. Creditworthiness and the likelihood of loan repayment are indicated by this number. A person with a high CIBIL score is more likely to be approved for a loan and more likely to repay that loan in accordance with the terms and circumstances set forth by the bank.

Each credit user’s information is documented in their CIBIL report. Consider credit rating, credit conduct, credit record, etc. A credit score is a three-digit figure based on an analysis of a person’s credit report and financial history. CIBIL scores range between 300 to 900. If your score is high, you should have an easier time securing a loan or using other types of credit.

Lenders analyze credit reports primarily to see if a borrower has a sufficient credit score before approving a loan. CIBIL score is based on numerous aspects such as repayment history, types of credit obtained, number of loan accounts kept, credit history, outstanding loan amounts, etc.

Additional Read: CIBIL Login, Registration And Credit Score Meaning



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