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Wealth planners often stress on the need to maintain a healthy CIBIL score for securing a loan
But what is CIBIL score and why is it essential to focus on the CIBIL score for one's credit profile? CIBIL score reflects the
creditworthiness of an individual, which is maintained by TransUnion CIBIL
Simply put, the organisation rates an individual's credit worthiness on the basis of loans taken and repayment history
It was established in the year 2000
CIBIL sources financial data such as loan and credit card information from leading banks and other financial institutions.What is CIBIL
Score?CIBIL is a leading credit bureau in India
It generates a credit report and a three-digit number ranging from 300 to 900 to define the creditworthiness of an individual
A credit report is a record of the activity on credit accounts
It is generated on the basis of credit information collected from member banks and credit institutions over a period of time
Credit score (commonly known as CIBIL Score) is an objective measurement of creditworthiness based on credit report information.Importance
other financial institutions check an individual's credit history before approving loan applications as this indicates financial stability
and capability to repay a loan.A higher CIBIL score boosts the prospects of getting a loan and at a favorable rate of interest
On the other hand, a low score can damage the chances of tapping finance
The minimum CIBIL score required to get a personal loan is 750 or higher
Creditworthiness is affected by factors such as existing debt and high credit card balances.How to Maintain A Healthy CIBIL Score?The first
step to maintain a healthy CIBIL score is to build a positive payment history
This can be achieved by making timely payments of all your EMIs and credit card bills
Timely payments improve creditworthiness and heighten the likelihood of getting credit cards and loan approvals
One should avoid having a credit card that is not used
As far as loans are concerned, it is a good idea to opt for a bigger down payment, make bigger down payment on loans, choose longer loan
tenors and consider part-prepayments
A proper repayment plan should be in place at all times.How to find the CIBIL Score?Getting a CIBIL Score and Report is a simple processStep
1: Visit the website: CIBIL.comStep 2: Create an Account (Create your own username, password, and enter your name, email id and mobile
number)Step 3: Enter personal details (date of birth, address, Aadhaar number, pan card numer)Step 4: Verify your identity (with the help of
OTP or some additional personal questions)Step 5: Accept terms and conditions.That's it; CIBIL will display the Credit Information Report
(CIR).How to read the CIBIL Score?A CIBIL Report has detailed information on the credit availed till date, including home loan, personal
loan, credit card and overdraft facilities
The CIBIL score, as reflected in the 'Accounts' and 'Enquiries' section of the CIBIL Report, ranges between 300 and 900
A score above 700 is generally considered good
The CIBIL report contains various sections:Personal informationThis section contains the name, date of birth, gender and identification
numbers such as PAN, passport number and voter's number, besides address and telephone numbers.Contact InformationEmployment Information
and income details, as reported by the member banks and financial institutions.Account informationThis section contains the details of past
credit, including name of lenders, type of credit, account numbers, etc.The full credit report is available for free once a year
You have to pay Rs 550/- to get the report on more than one occasion annually
The CIBIL website also offers some paid subscription plans, which are worth checking.The bottom-line is that financial health is as
important as physical health and getting a pulse-check on financial health is the way to go.Get Breaking news, live coverage, and Latest
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