Money Guru: How To Take Care Of Your CIBIL Score For Better Financial Planning? Expert decodes

Money Guru: Credit score plays a big role in taking a loan. If you have a good credit score then it is easy to get a loan. But the question is why? Why credit score is important? What is CIBIL score? How is CIBIL Score determined? What is the CIBIL score required for? What is CIBIL Report? CIBIL Score Vs CIBIL Report? 

Expert Vikas Puri, Head of West Zone, Complete Circle Capital Pvt. Ltd. has answers to all these questions as he explains this in a chat with Swati Raina on the popular TV program Money Guru.

What is a credit score?
A credit score is a three-digit number that tells your credit history. It is determined by financial transactions that you do such as transactions with banks and financial institutions. CIBIL is the largest credit bureau company in the country. CIBIL Score is your credit score.

Credit Bureau
TransUnion CIBIL
Equifax
Experian
CRIF Highmark

What is your score?
  -                                   Score
very less                 -     less than 600
low                          -     600-649
OK                          -     650-699
good                       -     700-749
very good               -     750-900

Who has a credit score?
Bank
Financial Institution
Insurance Companies
Workplace

How is a credit score determined?
A credit score is determined by financial transactions. Many factors affect the credit score. Payment history plays an important role - not paying bills on time, paying EMIs late, holding more credit cards, excessive use of credit cards – lead to a bad credit score.

Low CIBIL Score?
If the CIBIL score is low, then it is a matter of concern. A person with a low CIBIL score will face many difficulties in taking a loan from the bank. Loans like personal loan, business loan because loan approval or rejection depends on the credit score. A low score increases the risk of loan rejection. Apart from this, a low score also has an impact on the loan amount.

How to Improve CIBIL Score?
The credit score is decided by CIBIL, as mentioned above. It is in your hands to improve your credit score. Keep credit card due balance low. Pay EMIs on time. Get a good ratio of all types of loans. Avoid taking excessive unsecured loans and do not apply too much for loans.

Understand CIBIL Report
CIBIL report is an accounting of credit history. The report includes personal information and contact details. Apart from this, complete information about employment, loan account and credit are also available.

CIBIL Report - Detail
Banks check the CIBIL report on the loan application.
The report is generated on the basis of loan, credit card payments.
Banks/Financial Institutions inform the agency every month.
The CIBIL report is provided to the lenders.
The loan application is reviewed on the basis of the CIBIL report.
From the CIBIL report, the loan approval/rejection decision is taken.

CIBIL Score vs CIBIL Report
CIBIL Score is a 3-digit summary of the CIBIL report. It gives information about credit history and past payments. Whereas CIBIL report contains personal information, contact details. Apart from this, complete details of employment, loan account, and credit have also been given in the CIBIL report.

CIBIL Report - How to Check?
It is easy to check the CIBIl report. Just follow these simple steps:
Step 1: Visit the website - www.cibil.com
Step 2: Enter Name, Email ID and Create a Password
Step 3: Enter ID, PIN Code, DOB, Mobile No.
Step 4: Enter the OTP received on the mobile
Step 5: Your CIBIL Score will be displayed in front of you.