Check your CIBIL score for free in seconds. Get instant access to your credit health and unlock better loan offers with RBI-licensed NBFC Hero FinCorp.
A credit score is a three-digit numerical figure credit bureaus calculate based on people's credit histories. India has four credit bureaus – CIBIL, Equifax, Experian, and CRIF Highmark – that maintain records of each Indian citizen’s credit accounts and assess how responsibly they manage their credit. Since the CIBIL score is a crucial score in India, lenders often rely on it to decide loan eligibility and interest rates. Having a strong score gives you instant access to your credit, making it easier to get approvals. If you pay your loan EMIs and credit card bills on time, have a diverse mix of credit accounts in your portfolio, have minimal outstanding credit balances, and have a long history of handling credit responsibly, you will maintain a good credit score over time.
In the following sections, let’s explore everything you need to know about credit score, how to check your credit health, its importance, benefits, factors affecting it, and other crucial details.
Those of you thinking, “How do I check my CIBIL score for free?" can follow these steps:
1. Log on to the credit bureau’s official website
2. Create an account or sign in using your login credentials
3. Fill out an online form with details, including your PAN number
4. Submit the form
5. Receive an email to your registered email ID and verify your identity through the link provided
6. Answer a few credit-related questions and get your credit report with a free CIBIL score via email.
Besides this, you can also use a CIBIL score calculator on a lending institution’s website to check the CIBIL score online. However, ensure it is an authentic and trustworthy website with advanced security measures to keep your financial details confidential. Those with questions like “When should I check my credit score?” can check it before applying for credit to measure their current eligibility.
When you apply for a loan or credit card, financial institutions like Hero FinCorp check your credit score online to determine your creditworthiness and the risk of default in lending money to you. While the CIBIL score ranges from 300 to 900, anything above a score of 750 is considered good enough to build credibility and attract lucrative loan offers. These are the standard credit score ranges worth knowing:
Your CIBIL score is crucial when it comes to loans and credit. Checking it regularly helps you stay on top of your financial health. Here’s why it is important.
1. A credit score is calculated based on your repayment history, outstanding balances, and credit mix, so reviewing it often lets you see the effects of your actions on your score.
2. It ensures the accuracy of the information in the credit report and makes it error-free.
3. A strong credit score gives you better negotiating power while applying for a loan.
4. The score helps you gain control over your finances and boosts your confidence in managing them.
5. It also creates a good impression on prospective lenders.
Credit bureaus calculate your credit score based on several factors, including the following:
Although it is not an overnight process, here are some practical ways to improve your credit score fast:
1. Clear all outstanding balances on loans and credit cards.
2. Check your credit report, identify errors in it, and get them rectified for an instant boost.
3. Minimise credit card usage to bring the credit utilisation ratio down.
4. Request an increase in your credit limit.
Once the credit score reaches a decent mark, follow these tips to maintain it there:
1. Pay all loan EMIs and credit card bills on time, as your CIBIL score is a crucial factor lenders look at before approving loans.
2. Avoid using too much of your credit limit, and keep the credit utilisation ratio below 30%.
3. Check your credit report regularly to track your recent credit activity and know what to expect while applying for a new loan.
4. Avoid applying for multiple credit cards and loans within a short period.
5. Do not cancel old credit cards, as they assure lending institutions that you pay your bills on time and have a healthy credit history.
6. Maintain a balance between secured and unsecured credit lines.
While most loan companies want to know your CIBIL score while evaluating your credit application, here are a few benefits associated with a high credit score:
The credit report is like a credit history summary that credit bureaus calculate based on your credit accounts, repayment history, and overall credit behaviour.
The credit report acts as a credit reference, based on which the credit bureau measures your credit score.
The credit report is a standalone document credit bureau creates based on your credit history.
You can request a copy of your credit report from the credit bureau only.
One credit bureau provides one free credit report in a year. Additional procurement of credit reports attracts charges.
A credit score is a 3-digit number that you get based on your credit report.
Most lending institutions check CIBIL scores to measure your credit risk as an applicant.
You get a CIBIL score solely based on the data available in the credit report.
You can check your free credit score at the credit bureau’s website or a third-party entity or NBFC.
You can check your free credit score online any number of times without restrictions.
A credit bureau is a data collection agency that gathers information about an individual's credit history and payment records from various credit accounts and makes it available to creditors. Also known as credit reporting agencies, they work in two ways:
1. Firstly, they compile the summary of your credit history based on your credit-related behaviour using your PAN number.
2. Secondly, they create credit score reports using your credit-related information and provide them to creditors to help them measure your creditworthiness. As an individual, you can also request your credit report to understand your credit situation better.
The Reserve Bank of India has authorised four credit bureaus to collect credit-related activities of Indian citizens:
1. TransUnion Credit Information Bureau (India) Limited (CIBIL): CIBIL is one of India's oldest credit information companies. The credit score from CIBIL, also known as the CIBIL score, ranges from 300 and 900.
2. Experian Credit Information Company of India Private Limited: Experian is a multi-national credit reporting agency established in India in 2010. The Experian credit score ranges from 300 to 900.
3. Equifax Credit Information Services Private Limited (ECIS): Equifax is a joint venture with Equifax Inc. USA and some leading finance companies in India. The Equifax credit score ranges from 300 to 900.
4. CRIF High Mark Credit Information Services: Founded in 2007, CRIF High Mark is a full-service credit information agency with credit scores ranging from 300 to 900.
When you apply for a loan, your financial institution will approach a credit bureau to obtain your credit report and evaluate your loan application.
