CIBIL Score: Whenever someone goes to take a loan, the first thing that is checked is the CIBIL score. Your credit score is like your report card, which tells how your repayment history has been in the previous loan. This score is between 300 and 900. The higher the score, the higher the chances of getting a loan. Now the question arises here, how is it calculated (Cibil Calculation). Let us know which 4 things (Factors affecting Cibil Score) are looked at while calculating the CIBIL score.

1- Payment History: Do you repay the loan on time or not?
Whether you have paid your old loan on time or not, this plays the biggest role in the calculation of your credit score. It shows how many payments you made on time, if late, then how many times you delayed, and also shows how many times you missed the payment or EMI. Its share in the calculation of the CIBIL score is about 30 percent.

2- Credit Exposure: How much credit do you have, and how much did you spend?

Apart from this, it is also seen what your total outstanding is, how much credit or loan is in your name, and how much of it you have used. Its share in the calculation of the CIBIL score is 25 percent.

3- Credit Type: Is the loan secured or unsecured?

While calculating the CIBIL score, it is also seen what type of loans you have. In this, it is checked how many unsecured loans there are and how many secured loans there are. The more secured loans you have, the better your CIBIL score will be. Along with this, it is also seen what is the tenure of those loans. Its share in the calculation is about 25 percent.

4- Other Loan Activities: All other activities related to the loan
The remaining 20% ​​in this calculation checks other activities related to your loan. It looks at how many loans you have taken recently, that is, how many loan accounts have been opened and closed in your name. It also looks at what your credit utilization ratio is. Let us tell you that it should not be more than 30-40 percent. CIBIL has given information about all these factors on its website.

What is a credit score?
The CIBIL score is your credit score, which is a kind of your financial report card. This score ranges from 300 to 900, but a CIBIL score of 750 or above is considered good. You can improve it by doing transactions in a better way, but for this, you should first know how the CIBIL score is calculated. It is calculated based on 4 points.

How much time does it take for the credit score to improve?

Generally, the CIBIL score will show a significant improvement in 6 to 12 months. The score doesn't need to increase immediately; it will increase slowly but surely. However, you will have to constantly work towards improving it.

Why is the CIBIL Score important?
CIBIL Score tells how well you have repaid your previous loans. Banks look at it and decide whether it is safe to give you a loan or not.

What is a good CIBIL Score?
Most banks and financial institutions consider a CIBIL score of 750 and above as good. This increases your chances of getting a loan.

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