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May 16
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Factors that Affects Your CIBIL Score

5 Factors that Affects Your CIBIL Score

The most important criterion which determines your eligibility for any kind of loan in India is now your credit score. This is a three digit score generated by CIBIL (Credit Information Bureau India Limited) on the basis of your credit history. The score generally ranges between 300 and 900 with 300 meaning poor credit history and 900 meaning excellent credit history. (Antworksmoney offers credit counseling service too.)

Financial institutions in India generally prefer lending loans to individuals with a CIBIL score of 700 or above. If you are looking for ways to improve CIBIL score, you surely need to know the factors that affect the score. To help you out, we have created a list of 5 of the most important factors that can help you improve CIBIL score.

  1. Repayment history

The most important factor is your repayment history. For maintaining good repayment history, you need to clear all the loan repayments and credit card bills on time. Every single default affects your CIBIL score negatively. If you are searching for how to improve CIBIL score quickly, improving your repayment history is one of the most effective options.

  1. Credit utilization

For calculating credit utilization, the credit limit sanctioned on your credit cards and the amount you generally utilize on a monthly basis will be taken into consideration. If the credit utilization is high, meaning if you generally use most of the sanctioned amount on your credit cards, it will negatively affect your credit score. Reduce the utilization to improve your CIBIL score.

  1. Duration for which you have been using credit

While this can be surprising but the duration for which you have been using credit in the form of loans and credit cards also has an impact on your credit score. If you have been using credit for a long time and have a good history of timely repayments, it will improve your CIBIL score.

  1. New credit card or loan applied

Banks and NBFCs report to the CIBIL every time you apply for a new loan or credit card irrespective of the fact that whether you were approved or disapproved for the loan or card. If there are several entries of new applications on your profile, it will lower your score.

  1. Credit mix

If you are searching for ways to improve your CIBIL score, it is important to have a good mix of loans on your profile. Unsecured loans affect your score negatively and secured loans affect the score positively. So, try to keep a mixture of both with secured loans being higher between the two.

These are 5 of the most important factors that affect your CIBIL score. If you are looking to improve CIBIL score, work on these factors and you’ll surely see significant improvements in your score over time.

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