Good CIBIL score -:- www.deekpay.com

Understand why it is crucial to have a good CIBIL score.CIBIL score is one of the most important factors that lenders consider while offering you credit cards and loans including personal loans, home loans, car loans, LAPs etc. What is a CIBIL score? A credit score is a three-digit numerical summary calculated by credit rating agencies based on your repayment behaviour and credit history to understand your financial health and creditworthiness. These credit rating agencies (mainly CIBIL, Experian, CRIF High Mark and Equifax) are authorised by the Reserve Bank of India to collect data from partners to assess your credit score. Credit scores range between 300 and 850, with a credit score of 750 or more being considered a sign of a healthy loan.

Why is it important to have a healthy CIBIL score?

A good CIBIL score can help you enjoy the following benefits:

Get a loan fast: a good credit score can make it easier for you to get a credit card or loan from a lender. This is because your healthy credit score gives lenders confidence that you will be able to repay your loans on time or early and will do so in the future.

Low interest rates: those individuals with good credit scores are able to get loans at lower rates than others.

Attractive credit card offers: people with high credit scores will get various offers from different credit card companies, but these offers will not be available to people with low scores.

How do you maintain a good credit score?

Pay your EMIs on time: always pay your credit card bills and loan EMIs on time as a basic rule. This is because any delay could result in your credit score going down by a few points.

Maintain Credit Utilisation Ratio: this is the ratio of your credit card limit to the total amount outstanding. You must ensure that this ratio remains at 30% to keep your credit score stable. You can limit your spending to avoid maxing out your credit card every month.

Maintain a healthy credit mix: Credit mix is the ratio of secured loans (e.g., car loans, home loans, etc.) to unsecured loans (e.g., credit cards, personal loans, etc.). You must ensure that your credit history is a healthy mix of secured and unsecured loans. This is because, if you have a large number of unsecured loans, you will not be considered creditworthy.

Avoid applying for multiple loans at the same time: this practice may lower your credit score. Why? Every time you apply for a loan, the lender looks at your information and such enquiries are marked as "hard enquiries" on your credit report. Each time your loan application is denied, your credit score drops a few points. In addition, these enquiries are visible to other lenders, who will see you as someone in desperate need of credit.

Review your credit report regularly: Credit scores are calculated by credit assessment agencies based on the information provided by the lending and credit card agencies. However, if incorrect information is listed in your credit report due to a manual error by the lender or any fraudster's behaviour, it may affect your credit score. Therefore, review your credit score regularly and make corrections if you find any errors.

How to check your CIBIL score?

In order to keep track of your credit reliability and identify errors, it is important to check your credit report regularly. You can check your credit score for free through the Paytm app. All you need to do is to fill in some necessary information like full name, mobile number, permanent account number, etc. and then you can check your free credit report immediately.

Useful tip: You can get unlimited access to your credit report on the Paytm app as it is a soft enquiry and does not affect your credit score.