cibil score

Best Way to Monitor Your Credit Score Online For Free

Although the drive for better financial inclusion boosted the number of credit-active individuals, most of them are still not aware of their credit score. As per a survey, almost 68% of the respondents do not know their respective CIBIL scores.

Once they know how to check the CIBIL score online, it will be easier to monitor the score and improve it. Subsequently, it will help them improve credit eligibility to a great extent. 

Following are the best ways to check the CIBIL score for free.

How to check CIBIL score online?

Checking the CIBIL score online is simple and takes only a few minutes. The step-wise process is mentioned below:

Step 1: Open a new tab on a browser and go to the official website of TransUnion CIBIL

Step 2: Provide your name, email id, contact number, address to create a new account with TransUnion CIBIL. Note down your free CIBIL score login id and password

Step 3: Duly fill up an application form with details like date of birth, PAN and likes

Step 4: Authenticate yourself with OTP received on your registered mobile number or email id

Step 5: Check your CIBIL score for free

Alternatively, selected NBFCs like Bajaj Finserv also allow customers to check free CIBIL scores online once a year. Note that individuals can check their credit score online for free only once a year via TransUnion CIBIL. For multiple CIBIL score checks, one needs to have a paid subscription. It also allows one to check credit reports thoroughly, including the score. 

Usually, a CIBIL score of 750 and above is considered ideal to qualify for most financial products. But, first, individuals need to know the factors that affect this score. 

Factors affecting CIBIL score

  • Credit history: The history of credit plays the most vital role in determining CIBIL score. Almost 30% of a CIBIL score attributes to this factor.
  • Credit mix: Too many loans and credit cards affect almost 25% of CIBIL ratings.
  • Credit exposure: Increasing the credit limit also influences 25% of one CIBIL score. 
  • Other factors: The rest of 20% of CIBIL scores depends on different factors. 

Thus, besides knowing how to check the CIBIL score online for free, one also needs to improve this score, especially before applying for any credit. 

Ways to improve CIBIL score

Individuals who want to improve this score can follow some simple tips mentioned below:

  • Clear the existing debts faster

Accumulation of multiple debts not only increases the financial obligations but also affects the credit score drastically. Thus to avoid falling into a debt trap and maintain a higher CIBIL score, one must clear their outstanding at the earliest.

Be it credit card bills or loans EMIs timely payment is one of the key factors of boosting the CIBIL score. 

  • Limit credit inquiries 

When individuals check their respective CIBIL scores, it does not impact the score. However, before extending any credit, lenders check an applicant’s CIBIL score, which counts as hard enquiry and affects this score.

Thus, it is better not to apply for multiple credit products and within a short duration. It will help keep the hard enquiry under check and upkeep the CIBIL score.

  • Maintain a low credit utilisation ratio

The percentage of credit one uses against a pre-defined limit is known as the credit utilisation ratio. Preferably, one should keep this ratio below 30%.

For instance, an individual possesses a credit card with a limit of Rs. 1 lakh. The cardholder should ideally spend up to Rs. 30,000 to maintain a high CIBIL score. Contrarily, a point to remember here is that one can exceed this limit, but if it happens regularly, then it will hamper their credit score.

  • Keep FOIR under check

The Fixed Obligations to Income Ratio is another determinant of the CIBIL score. Financial experts advise keeping the FOIR below 40% of one’s monthly income to maintain a steady CIBIL score. 

  • Check credit reports frequently 

Although not directly connected with the CIBIL score, regularly checking the credit report helps in addressing any discrepancy that often pulls down this score. Since a CIBIL report includes all the credit details of applicants, it helps detect any outdated or wrong information. 

Besides, the CIBIL score further goes down if any loan account is mentioned as ‘settled.’

Following these tips, one can upkeep the CIBIL score significantly. Besides, individuals should also know how to check CIBIL scores online to monitor the change in scores from time to time. Nevertheless, one also needs to check the CIBIL score requirement for any particular credit product before applying. This will help them avoid rejections from financial institutions.