Credit Information Bureau of India Ltd [CIBIL] will launch Credit Scoring system known as Cibil Credit Score. If you don’t know what a Credit Score is, you can know it now here.
CIBIL is aggregating data on the basis of PAN, Passport Number, Voter ID of all borrowers. At the end of August 2007, CIBIL had credit profiles of 90 Million individual borrowers. Every month CIBIL sends out more than 2 million credit reports to various institutions to analyze a person’s creditworthiness before lending.
The CIBIL Credit Score System:
It will be on a scale ranging from 100 through 999. Lower the Cibil credit score, lower the chances of getting money on credit. Say if your credit score is close to 100, then this implies, outright refusal of credit, requirement of additional security / guarantee, higher down payment , shorter duration and higher interest rates.
If you have a very high Cibil credit score, say 800, this implies, lower interest rates, waiver of processing fees and faster disbursement of funds. The CIBIL scoring system will go live by the end of this year.
How can I improve my CIBIL Credit Score ?
- Pay all your EMIs on Loans in time.
- Never fail to pay the Minimum Payment required by your Credit Card. CardBhai recommends full payment on credit card every time. Credit Card is categorized as revolving credit and is essential to build a good credit history
- Never borrow Personal Loans for risky ventures such as investing in the share market.
Don’t be disheartened. Credit system always gives scope for improvement. At any point of time you can start improving your credit score by simply paying of all your debt and not opting for more until your score inches higher.
Questions and comments can be sent to feedback @ cardbhai.com.