Cibil Report: Understanding Your Creditworthiness and Financial Health

Today, availing of a loan to meet various financial requirements has become a common thing. Whether you want to purchase your dream home, go on a luxurious holiday, or buy the latest car, a loan provides an easy way to access funds for such needs.

However, simply applying for a loan doesn’t guarantee you getting it. Before sanctioning your loan, lenders will check your CIBIL report to determine your creditworthiness.

Your credit status plays a crucial role in getting a loan and the interest rate at which the loan is offered.

Read on to learn how your CIBIL report can help you to understand your creditworthiness and financial health in the long run.

CIBIL Report: What is The Significance?

A CIBIL report is an important document that acts as a record of your financial history. It is a Credit Information Report (CIR) providing information about existing and closed credit accounts, repayment history, credit enquiries, and more.

This report is compiled by the Credit Information Bureau (India) Limited (CIBIL). It is one of the four credit information companies under the Reserve Bank of India (RBI) license. The data compiled in this report is accumulated from financial institutions and banks.

Your CIBIL report assumes a lot of significance as it provides your CIBIL score based on your credit behaviour. When you apply for a loan or a credit card, this score helps lenders determine whether the loan should be sanctioned. The higher your CIBIL score, the better your chances of negotiating lower interest rates for your loan or credit card.

What does Creditworthiness Refer to?

Creditworthiness assesses how well you have handled your finances thus far. A lender analyses your creditworthiness to gauge whether you will likely default on your loan repayment obligation.

Maintaining high creditworthiness can help you get approved for a new loan or a credit card easily. Further, it can enable you to obtain credit at better interest rates. Thus, you can save a significant amount while repaying the credit.

How to Understand Your Creditworthiness From CIBIL Report?

Your CIBIL report provides deep insights into your credit behaviour. When analysing your creditworthiness, your CIBIL score can indicate a lot. 

Your CIBIL score is a 3-digit number that demonstrates your creditworthiness. This score ranges between 300 to 900. 

A CIBIL score of more than 700 is considered good. You have a great chance of getting the best interest rates when obtaining a loan or credit card.

A score between 600 to 700 means you have a good track record. You may be offered credit at a slightly higher interest rate than those who are considered to be the most creditworthy.

Your CIBIL score is average when it falls from 500 to 600. It indicates that you may get a higher interest rate if you apply for a loan or a credit card.

If your score is below 500, you may find it difficult to obtain credit. But you can change this scenario by improving and maintaining your credit rating.

When your CIBIL score says NA or NH, you don’t have enough credit history to be rated. NA stands for ‘not applicable’, and NH means ‘no history’.

Steps to Check CIBIL Score Online

When it comes to CIBIL score, many people have a common query, “How to check my CIBIL score?” You can easily check your CIBIL score online. Here are the steps that can help you out:

Step 1: Visit the official CIBIL website.

Step 2: Click on ‘Get Your CIBIL Score’.

Step 3: Input the required details, such as name, email ID, password, PIN code, date of birth, and mobile number.

Step 4: Upload your ID proof, such as your PAN card, passport number, Aadhaar number, or Voter ID.

Step 5: Click on ‘Accept and Continue’.

Step 6: You will receive an OTP on your mobile number. Enter the OTP in the allotted space. Click on ‘Continue’.

Step 7: Click on ‘Go to Dashboard’.

Step 8: This will redirect you to the site www.myscore.cibil.com 

Step 9: Select ‘Member Login’.

Step 10: Input your Username and Password. Click on ‘Login’.

Step 11: Once you are logged in, you can see your CIBIL score on the screen.

Factors That Impact Your Creditworthiness

Your creditworthiness depends on several factors considered when compiling your CIBIL report. Some of the major factors include the following:

Repayment History

Your repayment history plays a major role in determining your CIBIL credit score. It contributes to 35% of it.

Credit Utilisation

Your credit utilisation is another factor that greatly impacts this score. 

Credit Type

The type of credit you obtained and the duration of the credit contribute to 10% to 15% of your score.

Credit Mix

Your credit mix (such as secured and unsecured loans) accounts for 10% of your credit score.

Final Words

Your CIBIL report is an important document that provides access to your CIBIL score. This score enables you to understand how creditworthy you are. It helps you to keep track of your credit status and take steps to improve your financial health if needed.

So make sure you maintain a high CIBIL score and keep track of your score to maintain a healthy financial journey in the long run.