Your credit score is an important factor that determines how easily you can get credit. There are four bureaus that offer credit scores, among which is TransUnion CIBIL. It assigns the CIBIL score, which is widely referred to by lenders in India.
You can get a free CIBIL score check and access your report too, from the bureau’s official website. You can leverage this to get free access to your score and understand your creditworthiness.
Read on to know more about the free CIBIL score check and how it helps.
What Information is Available in a Free CIBIL Score Check?
When you conduct a free CIBIL score check, you get access to your score and the report. Understanding the latter is crucial, as there is a lot of information in your report. This information will help you better determine which steps you need to take to improve your financial well-being.
A credit score report generally contains your personal information, employment details, enquiry details, and account information. The details in your account information and enquiry section form the basis of your CIBIL score calculation.
As such, you need to assess these sections and leverage the information to improve your financial standing. The account information section will have the details about when you opened or closed a credit account, the repayment timeline, the status of payments made, and more.
Tips to Use Your Free CIBIL Score Report for Improved Financial Wellness
Your CIBIL score calculation is carried out periodically. This is because credit bureaus do not update your data in real time. As such, there is a possibility for discrepancies to exist. For example, you may have paid the EMI on time or closed an account, but the same may not reflect on your report.
Since such an entry can negatively impact your credit score, rectifying it at the earliest is crucial. By checking your CIBIL score and report, you can note any such errors and raise a dispute to rectify them.
Lower Utilisation Ratio
Your utilisation ratio refers to the amount of credit you have used against the total credit assigned to you. This ratio has a significant impact on your creditworthiness. A high ratio would indicate a high dependency on credit, implying that you may be unable to manage your finances well.
Since you can check this information when you do a free CIBIL score check, ensure that you do not go overboard. Moreover, if you see a higher ratio, you can use the report to determine the most feasible way to lower your ratio.
Ideally, you should have a utilisation ratio of under 30%. Maintaining this will ultimately help you become debt-free and build a score that reflects creditworthiness.
Evaluate Your Accounts and Limits
Your CIBIL score calculation is done based on all the credit you avail from all the lenders. As such, the report provides a consolidated look into how much debt you have and how much limit you can still utilise.
For example, suppose your CIBIL reports consistently show a high credit card dependency, affecting your utilisation ratio. With this information, you figure out ways to lower the dependency or request for an increased limit on one of your cards. This is one way to lower the utilisation ratio.
Now, if you have multiple credit cards, checking and calculating individual utilisation can be cumbersome. However, a credit report saves you the hassle of getting your account statement from different lenders and then assessing where you stand.
Moreover, by having all the information in one place, you can make quicker and more informed decisions.
Assess Your Credit Mix
It is not just loans that affect your credit score but the type of loan that you avail as well. Having too many unsecured loans can harm your score. Lenders generally consider an applicant as risky who has availed several unsecured loans. This may make them less likely to approve another unsecured credit application.
Since your credit report also shows the type of credit you have experience with, you can check it regularly to ensure you have a good mix. Moreover, you can also check your report before applying. If there are multiple unsecured loans, you can opt for a secured one instead. This ultimately helps you make informed decisions and plan your finances accordingly.
Check Application Frequency
When lenders check your credit score, it registers a hard inquiry into your profile. Every hard inquiry has a negative impact on your score, causing it to dip slightly. Naturally, too many inquiries in quick succession will lower your score by quite a bit.
This can be hard to recover from, especially if you need a loan but access one due to your low score. By carrying a free CIBIL score check, you can check your report and apply for a loan accordingly.
Guide to Initiate a Free CIBIL Score Check
To do a free CIBIL score check, visit the official bureau website, or an authorised financial institution’s website. After that, you can follow these steps:
- Register or sign-up with your mobile or email ID
- Enter your name and other required details
- Click on the check or submit button
- View and save your credit score and report
The above are general steps and may vary depending on whether you check via the TransUnion CIBIL website or a financial institution’s website. To register, you will need to provide your ID information and type, along with your birth date.
Remember that improving your credit score will take some time. You have to be patient and consistent with your efforts. Regularly check your score to ensure you take the right steps and measures to improve your creditworthiness.
While bureaus and financial institutions do offer a free CIBIL score check, it is only available once a year. For frequent checks, you can choose a subscription plan. Both bureaus and financial institutions offer these plans that enable you to monitor your score and maintain it to get customised offers.
Disclaimer: This article is a paid publication and does not have journalistic/editorial involvement of Hindustan Times. Hindustan Times does not endorse/subscribe to the content(s) of the article/advertisement and/or view(s) expressed herein. Hindustan Times shall not in any manner, be responsible and/or liable in any manner whatsoever for all that is stated in the article and/or also with regard to the view(s), opinion(s), announcement(s), declaration(s), affirmation(s) etc., stated/featured in the same. This information does not constitute a financial advice.
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