What Are The Different Aspects of Your CIBIL Score that You Must know?

One of the most often asked questions among customers is related to the CIBIL Score. Questions like ‘How can I increase my CIBIL score in an authentic method?’ and ‘What are those reasons that make my score low?’ are popular among customers. But to know the answer to all these questions, it is important to know what exactly is CIBIL score first and then we will come to the different aspects of it. Credit Information Bureau Limited of India (CIBIL) is one of the leading credit bureau companies of India that keeps track of the financial transactions of customers and provides a CIBIL report.

This CIBIL Report has all the details of your loans, credit card transactions, EMI Details, etc. According to these transactions, the bureau calculates your credit score which is known as CIBIL Score that ranges from 300 to 900. A score of 700 or anything above is considered to be a good CIBIL score while anything below 650 is known as the poor score. You can know your CIBIL Score check free without any cost on the official website of the CIBIL. We will be covering different aspects of the CIBIL score that you should know in order to understand it completely. So, without any further delay, keep reading.

CIBIL Score Aspects that a Customers Should Know

CIBIL score comes up after considering several factors and these factors are your Repayment History, Total amount owed by Borrowers, Number of years servicing the Debt, Number & amount of recent loans availed, or applied for, and Credit Mix. These aspects have different weightage in your credit score. We are explaining each of these aspects below so that you can understand better.

Your Repayment History

This aspect has the maximum weightage in your CIBIL Score, which is 35%, in the overall weightage of the overall score. So, what is the repayment history? Well, it is the percentage of all the loan and credit card payments that you made in the last 36 months. If you have been doing it on time, it will help improve your credit score and vice versa. Higher will be the percentage of on-time payments, higher will be its impact on your credit score. So, it’s important to always repay your dues on time. Even one missed EMI payment can affect your score negatively, so always spend according to your capacity.

The Total Amount Owned by Borrower

This aspect has a weightage of 30% of the overall weightage. The total amount owed by the borrower and credit utilization ratio decided your CIBIL Score. CIBIL determines the fact of the way an individual manages the total amount owed whether via Loan or Credit Card. A lower credit utilization ratio impacts your credit score positively which is the percentage of the total available limit that is used in a month. Banks advise customers to keep this ratio to 30% or less.

Number of Years Servicing the Debt

This aspect contributes to 15% of the overall weightage to CIBIL Score. So, let’s understand this. An individual who has a longer credit history will always have a good score rather than an individual who has several fresh new loans or credit cards. Some of the factors related to your credit history are the age of your oldest and newest account, the average age of all your debt accounts, etc. Simply put, the longer your credit history, the higher would be your credit score.

Number & Amount of Recent Loans Availed or Applied For

This factor contributes 10% of your overall credit score. If a person applies for multiple loans in a short period, your score can hurt badly. Also, if you have taken a large amount of loan and repaid it on time, it will help improve your score.

Credit Mix

Credit mix, having 10% weightage, is nothing but to have different kinds of credits such as credit cards and loans in your overall profile. The more kinds of credits in your profile, the higher will be your overall credit score if you pay them on time.