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Credit Score

Your CIBIL score is a three-digit numerical representation of summary of credit history. It comes from the records of financial institutions and banks, which reflect in your credit report. The credit score range is between 300 and 900. Any score more than 750 is considered as plausible for securing credit card and loans from banks and institutions.

It may seem tedious to maintain a good credit score. However, if you adhere to healthy financial practise by paying credit card bills, EMIs, and loans in time, make only genuine credit enquiries, then your credit score will strengthen. The score in your credit report holds importance when you apply for credit card, loan, house for rent etc.

CIBIL Score Range

Significance

0 or -1

0 or -1 credit score is assigned if you do not have a credit history. If there is no credit history, create one by using credit cards etc.

350 – 550

If your CIBIL score falls between 350 and 550, it means you have defaulted at repayments. It is a bad CIBIL score, making it difficult to avail new credit facility.

550 – 650

With such CIBIL score, you may be able to get loan approval, yet not all lenders would extend a line of credit. This credit score is fair and by making regular payments, you can strengthen the score.

650 – 750

You may be eligible for credit cards and some types of loans. Continue making regular payments to better the score.

750 – 900

This is an excellent CIBIL score. It means you have a sound financial behaviour. Financial institutions will readily offer you loans and credit cards.

What is Credit Score?

A credit score is a numeric score which depicts the creditworthiness of an individual based on his/ her credit history. Credit score is used by lenders in making lending decisions on a particular borrow request by assessing the repayment history of the borrower. Credit score of an individual ranges from 300 to 900. A person with higher score is considered as more trustworthy, financially.

How to Get Your Free Credit Score on Loanbaba?

At our website, you can directly create a CIBIL login and to enroll on TransUnion, you just have to provide few basic details, such as desired username, password, first name, middle name, last name, email, address and phone number and proceed further. Complete the registration steps and access your free CIBIL score in a jiffy. Loanbaba offers complete privacy. We are authorized to connect members with TransUnion in order to fetch CIBIL score. Please note that any details you provide, will not be shared with any third-party agents or members.

Why Should I Check My Credit Score?

  1. By checking your credit score you get to know all your outstanding credit at one place. You can check the outstanding balance of your credit accounts, loans, credit cards and mortgages in a single document. Through your credit report, you get to know the outstanding debts. You need not to check different bills and statements to know your various finances.
  2. If you know your credit score, you can apply for best suitable credit deals for you. Being aware of your CIBIL score will help the lenders to come to a decision of lending. You can make sure to apply for the best product as per you your suitability and you can get credit facilities matching your credit rating/ score.
  3. In case your credit history is not so good, you can improve it by knowing what has led to a bad credit score. This can be understood after checking the credit report. You can improve your credit score by working on your financial behavior that has caused a bad CIBIL score.
  4. Your credit history constitutes the list of the various lenders to whom you owe money. The report has a record of your various applications to different lenders (whether approved or not). Through this you can make sure that you do not apply to same lender who has already rejected your application earlier.
  5. In case there are mistakes in your credit score report, you can contact the relevant lender and get it rectified at the earliest. There is no harm in checking your credit score as it does not affect your CIBIL score.
  6. You can safeguard yourself from identity fraud when you check CIBIL Score In case there is any suspicious/ unfamiliar credit application in your credit score, you can report the same to the relevant authorities so that it can be dealt accordingly.

What are CIBIL Score Ranges and Their Significance?

A CIBIL score varies between 300 and 900. The significance of different CIBIL score ranges is given below.

0 or -1

If you do not have any credit history via credit card payments or loans, then you will be assigned the credit score of 0. To create your CIBIL score, consider starting a credit card transaction or take a loan, and repay the EMIs meticulously.

350 – 550

If you secure a score in this range, the CIBIL score will be counted as bad, which means you may have defaulted in repayments or payments, and may not be able to secure new credit cards and loans.

550 – 650

If your score is between 550 and 600, then your score is fair, yet not good. Try making regular payments and you have the potential to increase the CIBIL score and gain back the trust of lenders and credit card companies. Your loan request may not be necessarily rejected, but approval chances are low.

650 – 750

With a credit score in this range, you can be considered as eligible for credit card and loan approval. Continue making payments and repayments on time to keep up the score and better the same.

750 – 900

If you have a score of 750-900, it means you have been following sound financial practise and regularly paying off credit card bills and loan EMIs. Any bank, NBFC, lender and financial institute will be more than willing to offer you credit card and loan.

What Makes Your Credit Score Go Down?

By monitoring your CIBIL Score from time to time or signing up for credit score alerts, you come to know the fluctuation of your credit score over a period of time. Below provided are a few possible reasons that could lower your credit score.

  • Your Payment Delayed by More Than 30 Days

Your payment history has a significant impact on your credit rating/ score. Your installments/ payments (loan or credit card) falling due for more than 30 days are reported invariably to credit information companies and are further reflected in your credit report. Such delayed payments may result in dropping your credit score.

  • Making an Expensive Purchase

A big purchase from your credit card may affect your credit score negatively even if you pay the full balance well in time. It is considered a crucial factor by the credit information companies that how much portion of your credit limit is being used at a particular point of time. This is basically due to the reason that credit card issuer reports the balance to the credit bureaus on the last day of the billing cycle and not the due date. In such cases, you can pay the balance back to the card issuer and avoid making more transactions from the card.

  • Your Unpaid Account is Sent to Collection

When you pay your credit cards and loans well in time but skip paying your other accounts (non credit) such as telephone/ mobile bills, it is considered as a default. In some cases, the concerned institution may send the balance to a collection agency, which may be reflected in your credit score. In this way your credit score can be hampered.

  • You Made a New Credit Application

Every time you apply for a fresh credit facility, the information related to your enquiry is transmitted to credit information companies like CIBIL and hence are recorded by them. Now, since a number of inquiries constitute 10% of your credit score, the impact gets reflected on the credit score when you apply for a fresh loan. Further, it is important to know that these enquiries have an effect over your credit score for a period of only 12 months; hence your score may increase if you have only one inquiry in past 12 months.

  • Decrease in Your Credit Limit

In case your credit limit is lowered, the portion of credit facility used goes up (in percentage or ratio) which may have a negative impact on your score. Hence, you may consider lowering your used credit limit with fall in overall limit.

  • You Closed a Credit Card or it was Cancelled

Closing credit card hampers your credit score especially in cases when card has balance. Sometimes the card issuer can also cancel your card, which will have a negative impact on your credit score.

How to Strengthen your CIBIL Score?

The payments you make towards loans or credit cards have the greatest impact on your credit score. If you falter, delay or miss payments then the financial negligence will lower your credit score. A low CIBIL score will disallow you from availing credit at nominal interest and in worse cases; you won't be able to receive approval on credit request.

You must repay outstanding credit amounts in time, because it leaves a good impression on lenders. Also, by systemizing payments you get to reduce financial burden. A healthy financial history makes for clean economical track record, and defaults in the same are expressed in your credit report. Six months of your financial history is the minimum that is considered when calculating your CIBIL score.

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