In order to obtain a good CIBIL score, you need to maintain a good credit history, the details of which will show up in your CIBIL report. The CIBIL score can, therefore, be compared to a grade or a rank based on how you have been servicing your credit.
Now that you know the link between your credit histories and credit score, you are naturally keen to do all you can to keep your CIBIL credit score as high as possible. But have you ever wondered what goes into the constitution of your CIBIL score? Here is a lowdown on the factors that have the greatest impact on your CIBIL score.
From India, Ahmadabad
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34Now that you know the link between your credit histories and credit score, you are naturally keen to do all you can to keep your CIBIL credit score as high as possible. But have you ever wondered what goes into the constitution of your CIBIL score? Here is a lowdown on the factors that have the greatest impact on your CIBIL score.
From India, Ahmadabad
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Understanding the Factors Affecting Your CIBIL Score
📊 1. Repayment History (35%):
- Your repayment history is the most critical factor influencing your credit score, accounting for 35% of the score. It is crucial to clear all bills and loan repayments on time to maintain a positive repayment history. Any defaults can significantly lower your score.
💳 2. Credit Utilization (30%):
- Credit utilization, which considers both your total credit card limits and the percentage of credit utilized, plays a substantial role (30%) in your CIBIL score. A high credit utilization ratio indicates riskiness to lenders.
⏳ 3. Credit History Length (15%):
- Surprisingly, the duration for which you have been using credit impacts your score (15%). Responsible handling of debt over a longer period, with timely repayments, can boost your credit score.
🔍 4. New Credit Applications (10%):
- Every new credit application triggers an inquiry on your CIBIL report, affecting 10% of your credit score. Multiple recent inquiries can have a negative impact on your score.
🔄 5. Credit Mix (10%):
- Having a diverse mix of credit types, including secured and unsecured loans, is essential for a good credit score (10%). A healthy mix of credit, such as mortgage, personal loan, and credit cards, can positively influence your CIBIL score.
By understanding these key factors affecting your CIBIL score, you can identify areas for improvement and work towards enhancing your credit profile. A strong credit score not only opens doors to better loan opportunities but also reflects your financial reliability.
From India, Gurugram
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📊 1. Repayment History (35%):
- Your repayment history is the most critical factor influencing your credit score, accounting for 35% of the score. It is crucial to clear all bills and loan repayments on time to maintain a positive repayment history. Any defaults can significantly lower your score.
💳 2. Credit Utilization (30%):
- Credit utilization, which considers both your total credit card limits and the percentage of credit utilized, plays a substantial role (30%) in your CIBIL score. A high credit utilization ratio indicates riskiness to lenders.
⏳ 3. Credit History Length (15%):
- Surprisingly, the duration for which you have been using credit impacts your score (15%). Responsible handling of debt over a longer period, with timely repayments, can boost your credit score.
🔍 4. New Credit Applications (10%):
- Every new credit application triggers an inquiry on your CIBIL report, affecting 10% of your credit score. Multiple recent inquiries can have a negative impact on your score.
🔄 5. Credit Mix (10%):
- Having a diverse mix of credit types, including secured and unsecured loans, is essential for a good credit score (10%). A healthy mix of credit, such as mortgage, personal loan, and credit cards, can positively influence your CIBIL score.
By understanding these key factors affecting your CIBIL score, you can identify areas for improvement and work towards enhancing your credit profile. A strong credit score not only opens doors to better loan opportunities but also reflects your financial reliability.
From India, Gurugram
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