How to Calculate CIBIL Score for Free?
Are you aware of what is CIBIL score? What is the role of the CIBIL score when you are applying for a loan? Why do you need a good CIBIL score in order to qualify for a loan? How can you do CIBIL score calculation? There is a huge myth that an individual can maintain a credit score only by having a credit card, but this is not true. You can maintain your credit score with many other techniques. In this blog, you will learn about CIBIL score calculation and the importance of having a good CIBIL score.
What is a CIBIL Score?
CIBIL score stands for Credit Information Bureau India Limited. It is a credit bureau that is responsible for managing and collecting information about the credit history of a person, company, or public and private institutions. It is an RBI-authorised credit bureau. CIBIL score is a three-digit code that determines the credit history of an individual that is maintained in the CIR (Credit Information Report).
Importance of a Good CIBIL Score
Possessing a good CIBIL score is crucial for taking a loan at lower interest rates. A good CIBIL score ranges between 750 to 900 and acts as an indicator of your ability to repay loans to lenders. You are most likely to qualify for new loans if your CIBIL score is high. Poor CIBIL score may disqualify you from getting a loan with the lowest interest rates.
You can also qualify for loans with lower interest if you have a good CIBIL score.
A high credit score has many advantages during the loan application process. It can lead to a quicker and faster loan application process, easy loan documentation, and lower i nterest rates. Check your CIBIL Score Calculation.
How to Build a Credit Score Without a Credit Card?
CIBIL score calculation is done mainly on the basis of your repayment history of any loan you have taken in the past. Here are some ways to build a credit score without a credit card:
Personal Loan
Your credit score can be easily boosted by a personal loan. A personal loan is an unsecured loan. Individuals can take loans from a bank, credit union, or financial institution that provides loan services. A secured loan is a personal loan that is not backed by collateral like personal property or a car. The lender evaluates the creditworthiness of the borrower by the income and credit score to determine whether they qualify for the loan or not.
Car Loan
In old times, cars were considered a luxury but in today’s world, everybody owns a car and it has become a need. You can easily finance a car by paying a certain amount as a down payment and converting the rest into EMI monthly payments. Paying your EMI on time builds your CIBIL score. Apply for a loan with MYZEON.
Financing the Required Things
Many Non-Banking Financial Companies (NBFCs) and banks provide loan facilities at a 0% interest rate on vital things. Paying the whole amount for anything you need in emergency situations can be difficult. However, you can opt for finance at zero or low interest.
How to do CIBIL Score Calculation?
CIBIL score calculation is based on some factors. Repayment history plays a crucial role in the calculation of your CIBIL score. That’s why it is said to pay your credit card bills on time because 35% of your credit score is determined by this.
Tips to Improve Your CIBIL Score
Here are some quick tips that can improve your CIBIL score:
- Keep a reminder on your phone before the due date to pay the EMI of your loan.
- Pay your credit card bills before the due date.
- Try to maintain clean financial records without any outstanding debts and late payments.
- Maintain your credit score and keep a check on it regularly.
- Maintain a stable employment history as it demonstrates financial stability and an ability to repay loans.
Conclusion
CIBIL score stands for Credit Information Bureau India Limited. It is an RBI-authorised credit bureau. Possessing a good CIBIL score is crucial for taking a loan at lower interest rates. A good CIBIL score ranges between 750 to 900 and acts as an indicator of your ability to repay loans to lenders. There are many ways to build a good CIBIL score other than owning a credit card. You have also learned some quick tips that can improve your CIBIL score and CIBIL score calculation.
