Your CIBIL score plays an integral part in determining your loan eligibility. Lenders take into consideration this score to judge if you qualify for a loan or credit product; it is therefore imperative to know how to Calculate Cibil Score and what makes up for it.
Let’s understand what is CIBIL score and how it is calculated.
What Does the Term CIBIL Score Mean?
CIBIL score is a 3-digit numeric summary of your credit history. The CIBIL Score ranges from 300 to 900 and is calculated on the basis of your loan accounts and credit card information, which lenders share with CIBIL on a periodic basis. Higher the score, more are the chances of your credit application getting approved as it indicates your better credit worthiness. A score of 750 & beyond is considered to be an ideal one & banks/NBFCs offers loans quickly to candidates having a score above this level. In fact, 79% of loans are sanctioned to individuals with a CIBIL score greater than 750.
Why Is Your CIBIL Score Matter?
Your CIBIL score affects various aspects of your financial life, including:
- Loan Approvals: Lenders assess your CIBIL score when you apply for a loan. A score above 750 increases your chances of approval.
- Interest Rates: You can get loan at cheaper interest rate if you have high CIBIL Score and save money.
- Credit Card Approvals: Credit card companies check your rating too before approving your application.
- Negotiating Power: A good credit score allows you to negotiate for better loan terms.
At Ruloans, we make it easy to check your CIBIL score free online without affecting your credit score. Get instant access to your CIBIL score report with just a few clicks!
How Is the CIBIL Score Calculated?
Your CIBIL score is calculated based on multiple factors reflecting your financial behavior. Let’s break down the key components:
- Credit History (30%) – This has the maximum impact on your CIBIL Score. Your track record in managing your past loans and credit card dues is tracked here. If you have taken a loan or credit card in the past, how regular you were in paying your EMIs / Credit Card Bills shows here and how much of outstanding you carried on your credit cards also features in this.
- Credit Utilization (25%) – This is the amount of your credit limit that you use. It would help if you aimed to keep your credit utilization below 30%. High utilization implies you are dependant on credit which can hurt your score.
- Credit Mix and Type (20%) – It is good to have a healthy mix of both secured loans (such as home or auto) and unsecured loans (such as personal loans or credit cards) within your credit portfolio. A healthy credit mix indicates that you are responsible borrower.
- Length of Credit History (15%) – The longer your credit history, the better for your score. Lenders like to see that you have a long-established pattern of good credit in your past. This factor takes into account how long your credit accounts have been established including the age of your oldest account and an average age of all your accounts.
- Recent Credit Behavior (10%) – Several loan applications in a short time can hurt your score. Lenders perceive this as a sign of financial distress, so it is best avoided.
Where can you Check Credit Score Free?
You must check your CIBIL score regularly to stay informed about your financial health. At Ruloans.com, you can check credit score free without impacting your credit. We offer a user-friendly platform for CIBIL score check online, giving you access to your credit report instantly.
Final Words!
CIBIL score is an important parameter that defines your financial credibility and access to loans or credit cards. By understanding how your CIBIL score is calculated & taking measures to improve it, you can increase the chances of your loan approval and also get better interest rates.
If you wish to Check CIBIL Score for Free, you can now do it with Ruloans.com easily. We check your credit score at a few easy clicks and without hurting your credit performance. As India’s leading loan distributor, we have partnered with 265+ Banks, NBFCs and other renowned financial lenders in India, and 25,000+ distributors PAN India, making us your one-stop junction for all financial Needs.
Whether you want to borrow or partner with us as a DSA Agent, at Ruloans, we ensure that it is easy, transparent, and has a higher commission (Payouts). Become a Ruloans Partner today and find out how you can achieve your financial dreams!
