The TransUnion CIBIL score plays a crucial role in assessing an individual’s creditworthiness. This three-digit score, ranging from 300 to 900, is provided by TransUnion CIBIL, a credit bureau in India. Lenders, such as banks and financial institutions, use this score to evaluate a person’s credit history and financial behaviour before approving a loan or credit application. A high CIBIL score (750 and above) indicates a strong credit profile and increases the chances of getting credit at favourable terms. Understanding the significance of the CIBIL score is essential as it empowers individuals to build a healthy financial life.
Building a good CIBIL score of 750 and above –
X, a young professional, wanted to improve his CIBIL score and access better credit opportunities. He realised that by taking specific actions, he could achieve his goal. Here’s what X did to build a good CIBIL score –
Credit utilisation ratio
X kept his credit card utilisation low. He aimed to use only 30% or less of his credit limit, as high utilisation can negatively impact the CIBIL score.
Example: X had a credit card with a limit of Rs. 50,000 but maintained his monthly spending below Rs. 15,000.
Timely payments
X made sure to pay all his credit card bills, loan EMIs, and utility bills on time. Consistent and timely payments indicate financial discipline and reliability to lenders.
Example: X set reminders for bill due dates and opted for auto-debit options to ensure payments were never missed.
Avoiding multiple credit applications
X refrained from applying for multiple credit cards or loans simultaneously. Each credit application triggers a hard inquiry, which can lower the CIBIL score temporarily.
Example: X researched thoroughly before applying for any credit product and ensured he met the eligibility criteria.
Regularly reviewing credit report
X obtained his free annual credit report from TransUnion CIBIL to monitor his credit health and identify any discrepancies.
Example: X spotted an error in his credit report and immediately raised a dispute to rectify it.
Maintaining a healthy credit mix
X held a mix of secured and unsecured credit, such as a credit card and a car loan. A diverse credit portfolio reflects responsible credit management.
Example: X obtained a credit card and a small personal loan to establish a varied credit history.
Closing unused accounts
X closed inactive credit accounts and loans with zero balances. This simplifies credit management and improves the credit utilisation ratio.
Example: X closed a credit card he rarely used to avoid unnecessary credit exposure.
Limiting credit requests
X was cautious while availing short-term credit, such as payday loans, as they may negatively impact the CIBIL score.
Example: X only borrowed from friends or family when faced with a temporary financial crunch.
Settling outstanding dues
X settled any outstanding dues or collections to clear his credit history.
Example: X paid off a pending medical bill that had been sent to collections.
Joint accounts
If X had a joint account with someone who has a poor credit history, it could affect his CIBIL score too.
Example: X ensured that any joint account holder he associated with had a good credit standing.
Avoiding settlements
X refrained from settling outstanding debts for less than the full amount owed, as it reflects negatively on the credit report.
Example: X negotiated with the creditor for a structured payment plan instead of settling the debt.
Regular credit usage
X used his credit accounts regularly to demonstrate active credit management.
Example: X used his credit card for regular expenses and paid it off promptly.
Patience and persistence
Building a good CIBIL score takes time and consistent effort, and X understood the importance of patience and persistence in this journey.
Example: X regularly monitored his CIBIL score and celebrated incremental improvements, staying motivated throughout the process.
Credit history length
X understood that a longer credit history adds credibility, so he maintained older credit accounts.
Example: X kept his first credit card active, even though he had newer ones with better rewards.
No co-signing
X refrained from co-signing loans for others, as it could affect his creditworthiness if the primary borrower defaults.
Example: X politely declined when a friend asked him to co-sign a loan.
Balance transfer wisely
X made informed decisions when transferring credit card balances to avoid affecting the credit score negatively.
Example: X transferred his balance to a new credit card only when it offered a lower interest rate and better terms.
Stepwise guide to check TransUnion CIBIL score by PAN card
Wondering how to check CIBIL score by PAN card? Here’s a step-by-step method, go through to understand.
Valid PAN card
Before proceeding, X ensured that he had a valid PAN card issued by the Income Tax Department of India.
Approach Transunion CIBIL’s site
X visited the official website of TransUnion CIBIL.
Click on ‘get your CIBIL score’
X clicked on the ‘Get Your CIBIL Score’ option available on the homepage.
Fill out personal details
X provided his name, date of birth, gender, and contact information as per the PAN card records.
Input PAN card number
X entered his PAN card number accurately in the designated field.
Authenticate identity
X verified his identity by answering a few security questions based on his credit history.
Agree to the terms
X read and agreed to TransUnion CIBIL’s terms and conditions for accessing the credit score.
Select an appropriate subscription plan
X selected the appropriate subscription plan based on his needs, which may include access to credit reports and scores throughout the year.
Make payment
X made the required payment through a secure payment gateway to complete the process.
Verify through OTP
X received an OTP on his registered mobile number and entered it for verification.
Assess CIBIL score
Once the payment was confirmed, X was redirected to his TransUnion CIBIL dashboard, where he could view his credit score.
Fetch credit report
X accessed his detailed credit report to review his credit history, accounts, and repayment behaviour.
Review for discrepancies or errors
X carefully examined his credit report for any errors or discrepancies and raised disputes if necessary.
Understand credit parameters
X reviewed the factors influencing his CIBIL score, which might include credit utilisation, payment history, and credit mix.
Make required ameliorations
Based on the credit report analysis, X identified areas for improvement and took corrective measures to build a better credit profile.
Ending note
By diligently following the steps to improve his CIBIL score and monitoring it regularly, X successfully enhanced his creditworthiness over time. Checking the TransUnion CIBIL score using the PAN card provided him with valuable insights into his financial health, empowering him to make informed decisions about credit and financial planning.
In conclusion, the journey of X showcases how building a good CIBIL score and accessing it through the PAN card can pave the way to a stable and prosperous financial future. By understanding and responsibly managing his credit, X and other individuals can open doors to various opportunities for credit and secure their financial well-being.