A Credit Score is an integral part of anyone’s financial status. It is a three-digit number that ranges between 300 to 900 and determines one’s creditworthiness or ability to repay loans or debt. This number is often based on the consumer’s repayment and credit history across various financial institutions. Let us learn about the different credit score ranges and what they mean.
What is a Credit Score?
A CIBIL Score between 750 and 900 is considered excellent. It shows consistent payment history and a great payment track record. Banks consider you at low risk of defaulting on payments because of your credit score. This means they are likely to offer you loans and credit cards.
Chances of loan approval
A CIBIL report is a comprehensive overview of a person's credit history. It contains information about their borrowing activities in the credit sector. It is a valuable source of insight and information. CRAs keep track of a person's borrowing activities. This information is used to calculate their credit score .The score ranges from 300 to 900.
This credit report powered by CIBIL helps CRAs to equate someone’s credit score, which in turn helps lending institutions comprehend the risk involved in lending money to that individual.
The average cost of a CIBIL report from an agency is INR 1000 or less. Here are the steps on how to create a CIBIL report with us:
A CIBIL report is a comprehensive overview of a person's credit history. It contains information about their borrowing activities in the credit sector. It is a valuable source of insight and information. CRAs keep track of a person's borrowing activities. This information is used to calculate their credit score, which ranges from 300 to 900.
This credit report powered by CIBIL helps CRAs to equate someone’s credit score, which in turn, helps lending institutions comprehend the risks involved in lending money to that individual.
The CIBIL report includes your credit score, payment history, credit card utilization, age of accounts, total accounts, and inquiries on your account.
The CIBIL report mainly comprises a three-digit number used to represent how well the credit has been managed by you. It can be calculated from your personal or home loan or the credit cards used in the past. This is primarily a measure of your ability to borrow. It is based on your past credit behavior.
The credit score is proof to lenders that you are a responsible borrower. This increases the likelihood of loan repayment. In other words, it acts as a guarantee.
Credit scores are indicators that allow a financial institution to assess your ability to repay the debt on time. The credit score is thus crucial in determining the risk of an individual or an asset.
A credit score is a comprehensive document prepared by a credit bureau that outlines your credit history. These credit bureaus gather and assess your financial information and prepare reports based on such details.While computing your CIBIL score, the following factors are considered:
Maintaining a high CIBIL Score has plenty of benefits, from more lender choices to low-interest rates. Let’s check these benefits in detail:
You can get an online credit report easily. Additionally, there are many benefits to checking your credit score. These include:
The key differences between a credit score, credit report, and credit rating are outlined in the table below:
|Credit Report||Credit Score||Credit Rating|
|It is a comprehensive, summarized copy of your credit history and resembles your creditworthiness. Most lenders use this document as your credit reference.||It is a 3-digit summarized version of your credit report. It considers all the information on the report, measures your credit risk, and computes an overall score ranging between 300-900.||After determining whether you can fulfill your financial commitments, credit bureaus provide credit ratings to businesses and even governments. Credit ratings show lenders how likely you’re to repay loans.|
|NA or NH||NA stands for Not Applicable, and NH stands for No History. NA in your credit report means there is no information available about your credit history. Since there isn’t any credit information to include in the report, this is also referred to as NH.|
|STD||STD in credit report stands for ‘Standard.’ You’ll find this term in your loan accounts and credit report. In your report, `STD` indicates that you have paid all outstanding amounts within 90 days, or on the due date.|
|SMA||SMA stands for Special Mention Account. This indicates that a designated account has been established to record Standard Accounts that have shifted to Sub-Standard. In such cases, payments are received after 90 days of the due date.|
|DBT||DBT here stands for Doubtful. It means that one of your loan accounts has stayed/remained as a Sub-Standard account for a year (12 months).|
|LSS||It stands for Loss. It implies one of your accounts where loss has been detected. LSS on your credit report means that you haven’t paid that loss amount, and it’s still uncollectible.|
|DPD||The full form of DPD is Day Past Dues. It serves as a track of your credit accounts’ payment schedules. Your payment is shown in the DPD area even though it is one day late. DPD can be modelled in one of two ways: Note or Numeric|
It is natural for your credit score to keep changing over time. Your credit score is updated and altered whenever new data is submitted to the three national consumer reporting agencies (CRAs).
A personal loan requires minimum score of between 720 and 750 on your credit report. If you have a good credit rating, banks will easily grant your request for a personal loan. They might also give you the loan amount you want at a low-interest rate.
Your credit report cannot be viewed by just anyone. A company needs to have what is known as a “permissible purpose” to see your report.
Since the credit score is linked to the PAN card number, a PAN card is required for a credit report check. Also, PAN cards are needed for tax return filing and address verification.
A hard credit query may lower your credit score by up to 10 points. This harm may not always be that severe.
A phone number is used to verify the identity of the person receiving the credit report. This ensures that only an authorized person can access it.
A CIBIL report is a useful tool for banks and NBFCs. It helps them to assess an individual's reliability and creditworthiness. This helps them to determine their ability to repay any debts in a timely manner. The significance of the credit score thus lies in the individual’s risk assessment.
Credit scores typically range from 300 to 850. Scores between 800 to 850 are considered excellent. Scores between 740 to 799 are considered very good. Scores between 670 to 739 are considered good. Scores between 580 to 669 are considered fair and scores between 300 to 579 are considered poor.
Score calculation in your credit report includes several factors. Common and significant ones include repayment records, credit history, and credit inquiry.
Your credit reports contain various types of information about your credit lines, repayment history, and credit limits. They also provide other details.
Your credit report does not include: - Marital status - Health information - Shopping patterns - Financial transactions - Income - Bank balances - Criminal history - Level of education
Unfavorable data that is true cannot be changed and usually stays on your credit reports for seven years. Creditors look at your CIBIL reports to evaluate your past debt repayment history. They use this information to decide if they will give you credit and what terms to offer.
The first step you must take if you find an inaccuracy in your credit report is to dispute the data with the credit reporting agency. You must provide copies of the supporting documentation for your claim and a written explanation of what you believe to be incorrect.
A credit report includes personal information such as a PAN number, name, residence, gender, and other facts in addition to financial information. The CIBIL report is a crucial tool for tracking all of your credit-related information. Using client credit information obtained from multiple banks and lending organizations, CIBIL generates a CIBIL report.
Your credit score can be checked by prospective lenders, your present creditors, insurance providers, and occasionally even your employer. These individuals and entities can evaluate your record whenever you make a credit request or after they have granted you a loan or credit.
Prospective lenders review your credit score to determine your likelihood of repaying the money you borrowed. A solid credit history shows that you have been a reliable borrower, and creditors will be more eager to give you that new loan or credit.
You have unlimited access to your credit report. This is so that your inquiry, apart from those conducted by creditors whenever you request a loan, is logged as a soft inquiry. The credit report has no effect from soft inquiries.
The minimum score required to apply for any type of loan is 750. Although you can also apply with a lower score, your chances of approval won’t be that high. A score of 750 or above will help you get your loan application approved quickly.
Pay your debts on time, accrue a high score, and your credit score will improve. To avoid worrying about missing deadlines, use a program that enables automated bill payment. You should avoid doing anything too much: Apply for credit responsibly. Do not take on much debt at once.