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Saturday, 9 July 2016

Do you know your “Credit score”? - A measure for your credit grants


CIBIL was founded in August 2000. CIBIL stands for Credit Information Bureau (India) Limited. This is India’s first credit information company which maintains the records of individual’s payments against the loan taken and credit card transaction. Based on the records a credit score is arrived. This forms the basis for all financial institutions to decide on the loan grant. Credit scores normally ranges from 300 to 900. As per a survey 79% of the loans are approved for individuals whose score is greater than 750

Image result for Images on credit score
Courtesy : nextadvisor.com

Now let us see what does various credit scores denotes to us.

Credit Score 300 – 600:

A score in this range means there are unpaid loans and write off in the past. Default in payments would have been done by the individual on multiple occasions. This is considered as highly risky by financial institutions and loans would be rejected with such low credit scores.

Credit Score 600-750:

This score suggest that there were few delayed payments in the past while settling payments. This is a moderate credit score and financial institutions would be extra cautious while providing loans on such credit scores. They make ask for either a guarantor or surety against the credit offered. Sighting the low credit scores the banks and other financial institutions would spike their interest rates

Credit score 750 -900:

A score in this range is considered a best score for offering loans. This score denotes that the past payment history is good. In fact most of the cold calls are done by banks to customers who fall in this bracket. So next time when you receive a cold call from a financial institution, then you can safely presume that you have a better credit score. The banks offer their best interest rates for individuals with high credit scores. The individuals also get an opportunity to negotiate on other fees like documentation charges, processing fee, pre-closure charges etc.

Image result for Images on credit score
Courtesy : eponafs.com

The above summary makes it more interesting for you as a reader to know what your credit score is. At the time of inception of CIBIL such services where not offered to the public. Now an individual can know his/her exact credit score from CIBIL by paying a nominal fee. There are other avenues to know your credit score as well.

One such link is given by me in this article below, which will help you in knowing your credit score for free. The scores reflected will be a closest match to the actual credit score. Even the values are not exact this will give an individual an indicative number on where he/she stands when it comes to credit score and make amendments to ensure the credit score is improved in the future. I tried to arrive at my credit score and it was very close to the actual one.


Why to wait ??? Go ahead and check your credit score for Free!!!



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