Credit

What Is CIBIL Score And How To Check It?

Until just a few years back, secured loans were the only type of loan offering. With the advent of unsecured loans, the lending industry has undergone a complete change. Unsecured loans mean that the borrower does not need to put up any collateral for the loans. However, that means additional due diligence on the part of the lender.

One of the most important requirements for such unsecured loans is a credit score. A credit score is an indication of a person’s ability to repay debt. There are different credit unions which calculate your credit score based on the following information:

  • Repayment of loan installments
  • Payment of credit card debt
  • Loan applications
  • How long you have had an outstanding loan
  • Number of outstanding loans
  • Type of credit
  • Hard inquiries on your credit reports

Each credit union calculates the score using a different formula. The credit score is often calculated based on the information reported by financial institutions. One of the most popular credit scores in India is your CIBIL score given by CIBIL TransUnion.

Your credit score is a 3 digit number that is calculated out of 900. The higher the score, the better your chances of getting a loan, especially unsecured loans like a personal loan.

How to check your CIBIL score:

If you have never checked your CIBIL score, the procedure is very simple. CIBIL checks your score completely online. You can even get a free CIBIL score from the CIBIL website. The first step is to go to the CIBIL website and fill up a form. The form requires details such as:

  • Personal details
  • PAN number
  • Aadhar number

Once these details have been entered, CIBIL TransUnion will send a One Time Password (OTP) to verify your identity. In case the OTP doesn’t work, they may call to ask you additional information. However, be clear that this additional information will not include your bank account details or PIN. In case anyone calls for that information, be sure to report them since those are phishing calls. No financial institution requires your bank account number or your PIN to provide any service to you.

The next step is to answer questions regarding your credit card, outstanding loans etc. Based on this information, your CIBIL score will be calculated.

CIBIL TransUnion may also offer a detailed report in lieu of some fees. However, a one time report is available free of cost. The system will create an account in your name. As a part of the account creation process, you need to verify your email address. Once you verify your email address, your account gets created. The next time you log into your account, your personal details, the CIBIL score and your credit report will be clearly seen

However, if you’re looking to apply for a loan, it is better to keep checking the CIBIL score frequently. Apart from CIBIL, there are 3 other credit agencies where you can check your score.