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Sunday, 16 June 2013

What are the Factors influencing CIBIL Score?

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CIBIL score is gaining its prominence among financial institutions as a source to understand credit worthiness of a customer. Let's understand how CIBIL actually works: CIBIL (Credit Information Bureau of India Limited) acts like an information data base of customers of different banks. If one has credit card or loan against their name, the respective lending authority will update the same to CIBIL. CIBIL maintains analyzes the record of how efficiently the payments were made. Every enquiry for a credit card or loan will be updated in CIBIL records. Whenever a request is placed by the individual for a credit card or loan, the financial institutions contacts CIBIL to assess the credit worthiness of the individual.

 

Factors which Influence your CIBIL Score:

 

1. Payment History: The payment history of an individual represents the financial state of an individual. As per CIBIL's assessment, if the payments are made as per the schedule and in the given time lines, it is considered as a positive sign. Late payments or defaults on the loans and credit cards indicate the financial troubles of the individual.

 

2. Usage of credit limits: This factor is highly pertinent to credit card usage. It is considered as a negative sign if an individual consistently consumes 80-90 percent of the card limit. Increase in the current balance of the credit card over a time period is a sign of increased repayment burden.

 

3. Number of loans and credit cards: Home loans and car loans are considered as secured loans and credit cards and personal loans are considered as unsecured loans. While higher number of secured loans impacts the CIBIL score positively, higher number of unsecured loans impacts it negatively.

 

4. Credit Hungry: Repeated applications for credit cards or loans signify the credit hungriness of an individual. Every enquiry made for any form of credit is reported to CIBIL. The lenders maintain caution in case of such individuals who are repeatedly trying for some or other form credit.

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2 comments:

  1. My loan was rejected. Credit Sudhaar was my choice. Initially they were slow. But their counsellors were able to handle all my queries. I will give Credit Sudhaar a positive review

    ReplyDelete
  2. I had no idea my credit was bad. The guys at Credit Sudhaar analysed my report. The process took some time but my credit was restored, enhanced and protected. I have no reason for complaints.

    ReplyDelete

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