A credit score or CIBIL is a three-digit number, ranging from 300 to 900, that will help to measure your credit history. The score calculates after taking into consideration your credit history, details found in your CIBIL report, and all this is maintained by the credit bureau Company named TransUnion CIBIL. There four major credit bureaus in India collects and maintains individual credit information and sells it to lenders in the form of a summarised report, named Credit Report. It helps in identifying the credit score based on your past credit history that you borrow from various lenders or banks. The credit bureau has identified the range of credit scores from 300 to 900. Also having the breakdown of this range as Above 750 is Excellent, 700-750 is Good, 650-700 is Average, and 550-650 is Poor and below 550 is Bad. Some of the primary key points to maintain a good credit score- Make timely payments, less utilization of Credit Cards, Pay your dues before the due date, Avoid Applying new credit accounts within a short period, etc. Making use of a cibil score calculator is very crucial.

How CIBIL score calculated- 

A credit score plays an essential role in a lender’s decision to offer you credit or not. There are five main factors which will help in CIBIL score Calculation:

1. Payment History- Your payment history stands as a significant factor which plays a vital role in deriving your credit score and shows that an individual pays their outstanding obligations on time. It is the most significant factor that affects in the calculation your CIBIL score. If you pay your credit dues on time, it will increase your count, and if you do not pay, it will decrease.

2. Types of Credit- Your credit score depends on the various factors; one of them is what kind of credit are you using. It is essential to maintain a balance of the secured loan as well as an unsecured loan. Accounts classify based on loans that you borrow like credit cards, mortgages, consumer finances.

3. Credit Utilization- Total amount owed also undertakes into account the percentage of credit available to a person that is currently using it, which is known as credit utilization. Usage of the highest credit utilization limit seems like you are credit hungry, and the lender will think that there is a higher possibility of doing a default.

4. Recent Credit Searches- This stands for an adjustment based on your new hard inquiries made into your credit profile. It helps in tracking how many times you have enquired for a loan. You should not apply for a loan, while your loan application is rejected from a bank.

5. Age of Account- This factor also affects the credit score that is new to credit. Period of credit history refers to the number of years, from how long you have a credit history of borrowing and repaying it.

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