What is CIBIL? How it is affected?

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Today the primary and foremost important criteria to get approval on your personal loan application and credit card application is CIBIL score. No bank or financial institution process your loan and credit card application without checking CIBIL score. CIBIL stands for Credit information Bureau India Limited which maintain individuals and companies credit record. This company assign credit score on the basis of credit history between 600 to 900. This company share the individuals credit history and score with banks and financial institutions. On the basis of the CIBIL score loan and credit card applications are processed or rejected. Generally 750+ CIBIL score is considered as good credit score by banks and financials institutions. So if you are looking for loan and credit card then maintain good CIBIL score. Lets discuss the things affect your CIBIL score.

  1. Payment History : Your loan and credit card payment history plays a very vital role in calculating CIBIL. To maintain a good CIBIL score pay all your loan installments, credit card bill and bank overdraft on time. Let me clear that CIBIL is not affected by saving account and current account transactions for not maintaining minimum balance in your account. Even if you can't pay the credit card bill, you can pay minimum amount due to to maintain your CIBIL score.
  2. Number of loan and credit card accounts : If you have so many active loan and credit card accounts. It adversely affect your CIBIL score.More accounts you have results in less CIBIL score. So keep avoiding taking too many credit cards and loans at one  time.
  3. Average loan period: If average loan period is more then it is considered as the healthy credit worthiness of a person and put a positive impact on CIBIL. So it's better to take long term loan rather to taking too many loans.
  4. Credit card utilisation : More credit card limit you will utilise, less CIBIL score you will be assigned. So try to pay your credit card bill regularly on time to maintain a good and healthy credit score.
  5. Dishonor of ECS: Ensure your ECS of loan and credit card EMI is debited regularly. It also has a negative impact on CIBIL if ECS is bounced.
  6. Overdrawn : CIBIL is also affected if there is overdrawing from your bank account.  Generally current account and salary account holders enjoy the right to overdraw  to the extent of limit permitted. Avoid overdraft but if it is used, Ensure the overdrawing amount has been paid regularly on time.

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