Your credit score is critical if you are planning to apply for a loan or a credit card. There are several credit bureaus providing a credit score in India. The CIBIL Score, provided by the credit rating agency TransUnion CIBIL Limited, is checked by most banks and financial institutions that provide credit.
TransUnion releases a report called the CIBIL Report that you can access to get a better understanding of your credit profile. Let us look at the details about your credit health that the CIBIL Report provides and how you can access this information to improve your credit health.
Key components of your CIBIL Report
Your CIBIL Report is usually divided into four sections:
- Personal information: Consider this part to be your financial passport. It includes information like your name, age, residence, and contact information. Check that the data in this section is correct and up to date.
- Account information: This part offers information on the credit accounts you now have or have had in the past. Consider this part to be your personal financial diary. It keeps track of the types of credit that you've obtained, how much you borrowed, and how quickly you repaid it. To keep your credit score good, you must maintain a healthy account information section.
- Enquiry information: This area serves as a visitor logbook, documenting the names of those who have visited your report. When you apply for credit, the lender will look at your credit record. If you have a high number of visits, this could signal that you are overly seeking credit. A high number of hard inquiries from lenders can have a detrimental impact on your CIBIL Score.
- CIBIL Score: Consider your CIBIL Score to be a grade sheet. Your score is between 300 and 900. The higher your credit score, the more likely you are to get approved for credit. Your credit history and credit behaviour influence your score.
Key factors to consider when analysing your credit report
Your creditworthiness can be affected by the five elements listed below:
- Credit score: This is the most important aspect of establishing your creditworthiness. A better score suggests that you are a trustworthy borrower and makes you eligible for different types of loans and credit cards.
- Payment history: Your payment history functions similarly to your attendance record. It keeps track of how timely you pay your bills. Late payments, defaults, and collections will all have an adverse effect on your credit score.
- Credit utilisation: Credit utilisation is the amount of credit that you use out of the total amount of credit available to you. Ideally, your credit utilisation should be 30% or less to maintain a good credit score.
- Credit mix: Your credit mix decides whether or not your financial plate is properly balanced. A well-balanced credit mix of secured and unsecured loans can demonstrate your capacity to manage various types of credit options.
- Credit inquiries: Each time you apply for credit, an enquiry is recorded on your CIBIL Report. Too many enquiries can signal to lenders that you are seeking credit excessively.
How to check your CIBIL Score online for free
You can request a free copy of your CIBIL Report from the credit bureau, but you can only do so once a year. If you want to maintain track of your credit health on a frequent basis, you may sign up for the Bajaj Finserv Credit Pass, which includes unlimited monthly credit score checks and a personalised health dashboard with an in-depth analysis of what's affecting your score.
The Bajaj Finserv Credit Pass, powered by CIBIL, is a yearly subscription plan that helps you keep your credit in good shape. It not only gives monthly CIBIL Score checks, but it also provides details of the factors influencing your score. You can use your Credit Pass to check if your CIBIL Score is affected due to missed or delayed payments. Or maybe it is the credit utilisation on your credit card that is leading to a low credit score. Ideally, your credit utilisation should be below 30% to maintain a healthy CIBIL Score.
Just the way you look at your BMI records to do the necessary exercises and get your physical health in shape, you need your credit health records to improve your credit profile. These insights will help you take the necessary steps to maintain a good credit score. And you can get your credit health insights easily with your Bajaj Finserv Credit Pass. For a limited period, the Credit Pass is available free of cost for the first year when you sign up.
Your Credit Health Report such as your CIBIL Report is critical for your financial well-being. You may quickly analyse your report and take the necessary steps to enhance your creditworthiness. This way, you can dramatically improve your chances of obtaining credit such as loans or credit cards in the future.
