3-Sep-2015 written by : FSI-Team
In the present financial scenario, with the increasing expenditure in almost everything and the opportunity to borrow money to avoid engaging your savings- credit cards and loan options have become extremely popular. That is the reason people are leaning forward to apply for loans. However, borrowing money or getting approved for a loan is not as easy as it sounds. In this case, you must maintain a good CIBIL score.
CIBIL is not something that is new to the financial sphere, but many people still have confusions and wonder what is a CIBIL score? CIBIL is Credit Information Bureau (India) Ltd or the company that is responsible for collecting, calculating and maintaining the payment and credit records of commercial entities, as well as individuals. There are many factors pertaining to the approval of a loan that you may have applied for, in a bank or some other financial institutions, in which CIBIL score is the most important factor amongst them that will determine whether you are eligible for the loan or not.
When you use a credit card from a bank, you have to repay the amount to the bank on time. The more you delay in repayment, the more you will be scoring negative on the calculation parameters of the credit score. The banks maintain the entire record of your credit and payment history. On a monthly basis, this record is sent to the Credit Information Bureau (India) Ltd or Credit Bureau. Depending on the information sent by the banks to CIBIL, an individual or a business entity’s CIR i.e. Credit Information Report is developed along with the credit score.
If you are planning to apply for a loan, you must know your credit score. However, many people have this question in their mind and frequently ask the finance experts, how can I avail a Credit Score? But, it is very easy to know your credit score. Not only does CIBIL do this job for you, but there are other companies also, who will do the task of getting your credit score.
Depending on this entire information received from the banks, your credit score will be calculated and sent to you. This score is very crucial when you are going to apply for a loan to a bank or finance company.