The CIBIL full form is the Credit Information Bureau of India Limited. TransUnion CIBIL is the provider of the official CIBIL score. CIBIL scores are three-digit numbers that range from 300 to 900. This CIBIL score is a quantitative indicator of your credit-repayment capacity.
Additionally, your CIBIL score essentially aids lenders in making the decision regarding whether or not to grant you a loan. You might receive higher credit card and loan rates if your score is around 900. Your bank will outrightly reject your loan application if you have a poor credit history and low credit score. However, if your credit score is strong, your bank will quickly approve your loan application and move on to the next stage.
What are the factors that impact your CIBIL score negatively?
Now that you are aware of the CIBIL full form, it is also important to understand the impact of this score. This would help you know how to maintain a good CIBIL score in the future. The following are some of the main things that can negatively influence your CIBIL score:
1. Not making your payments on time
The primary factor affecting your score is your payment history. It’s crucial to make on-time monthly payments for your loan EMIs and credit card obligations. Any late or missed payments harm your score and give the impression that you are inconsistent in repaying credit. With the help of Wishfin, you can keep track of your credit health over time and take action to fix it.
2. High credit utilisation ratio
Your credit utilisation ratio is the proportion of your overall credit limit that you have utilised. Experts advise keeping your credit use around 30% for a healthy credit score. Lenders are wary of borrowers who use their credit cards more than 50% of the time. Higher credit risk for the lenders results from a significant credit exposure.
3. No credit mix
One of the most popular factors used to determine credit ratings is credit mix or the variety of your credit accounts. Lenders can see from many credit accounts, such as personal, home, and credit cards, that you can handle multiple debts at once. Additionally, a disparity between your secured and unsecured debt can harm your CIBIL rating. As a result, it’s crucial to keep a good balance between secure and unsecured loans.
4. Outstanding Debt
Your credit report will be greatly impacted by unpaid debt. You should pay off any outstanding debt as soon as possible. Delinquent debt history might negatively affect your score significantly. Therefore, you must pay back both large and minor instalments quickly.
5. Errors in your CIBIL report
Your current and previous credit accounts are fully documented in your CIBIL report. Your score may suffer if your report contains any mistakes. Therefore, you must have any errors in your report corrected immediately. You may check your credit on-time EMIs, loan inquiries, repayment status, and much more using Wishfin to get the detailed CIBIL Report for free.
Tips for maintaining a good CIBIL score
Strong credit history can help you stand out to lenders as a reliable borrower and open doors to credit and loans. A good Credit Information Bureau of India Limited (CIBIL full form) score would allow you to make a good credit history and report.
Here are some of the ways through which you can maintain a positive CIBIL score on Wishfin.
- Paying credit card debt off before the due date.
- Never forget to make your loan EMI payments on time.
- Don’t waste your CIBIL credits.
- Balance your loan portfolio among secured and unsecured loans
- Check your CIBIL score and credit history frequently.
Credit Information Bureau of India Limited is very important in applying for credits and loans. Moreover, Wishfin is TransUnion CIBIL’s first authorised fintech partner. Since lenders seek a good credit score, having one improves your chances of obtaining a loan or credit. Several factors could reduce your CIBIL score. However, you should be aware of them and try to avoid those risks.