Whenever you go to take a loan from a bank, your Cibil Score is first seen there. CIBIL score is also called the Credit Score. CIBIL score is like your report card which tells about your previous repayment history. However, many other factors play a special role in determining your credit score. If you understand them well, then you can easily improve your bad score. If this score becomes good, then you will never have any problem in taking a loan again. Know how the CIBIL score is calculated.

If you have ever taken a loan before or you use a credit card, then their repayment history is seen i.e. whether you pay the EMI on time or not. Your repayment history plays a very important role in your CIBIL score.

The percentage of your credit limit that you use is your credit utilization ratio. Use only up to 30% of your credit card limit. Avoid making large purchases using a credit card. A high credit utilization ratio shows that you are overly dependent on credit cards. This affects your CIBIL score.

How many unsecured loans and how many secured loans you have taken in the past determines your credit mix. For example, if you have taken unsecured loans like personal loans, credit cards, etc. many times in the past, it shows that you are short of funds and your dependence on credit is very high. This affects your CIBIL score adversely. On the other hand, if you have been taking both secured and unsecured loans when needed, and have paid all of them on time, then it shows that you are capable of managing all types of loans. In such a situation, your credit mix remains balanced and your CIBIL score is better. This is the reason why most experts discourage taking unsecured loans more often.

Your credit history starts getting created from the first time you take a loan or a credit card. While preparing the CIBIL score, your credit history is also looked at. How old is your credit history and whether you have paid on time after taking a loan or using a credit card or not, all these things are looked at. This credit history also affects your CIBIL score.

Wrong information in your credit report, you have ever done loan settlement before, you are a guarantor for someone's loan and it is not being paid, etc. All these also impact your CIBIL score and can spoil your score.