How to take care of your CIBIL score for better financial planning

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Thousands of Indians are now suffering from bad credit scores and cannot cope with these circumstances due to lack of knowledge. Surely the average person has heard a lot about the CIBIL score, but has no idea what it means or its importance. People new to credit should be well aware that their credit score is the foundation of their financial well-being.

An individual’s credit score can lead to financial tragedy. People with strong credit ratings should also monitor their credit reports regularly, as their credit rating could drop due to incorrect information submitted to the credit bureaus. Therefore, one must first learn about CIBIL, then about the CIBIL score and how to improve it to avoid future problems when obtaining credit.

What is a CIBIL score?
CIBIL (Credit Information Bureau (India) Limited), currently known as TransUnion CIBIL, is a credit rating company that collects, manages and generates credit scores for consumers worldwide. TransUnion CIBIL was founded in 2000 and has 2,400 members, including financial institutions, NBFCs, banks and home finance businesses. TransUnion CIBIL is a credit agency that manages the credit history of more than 550 million customers and organizations.

Your CIBIL score is a number between 300 and 850 that describes your financial health. The better the score, the more the borrower turns to the prospective lender. Not only will a high credit score help you get a loan, but it will also ease the doors to qualifying for a loan at very low interest rates. Bad credit can make it harder to get a home loan, car loan, or credit card. It can also cause you to have higher interest rates, which ultimately makes your loan expensive to repay.

Here are some essential credit habits you should keep in mind when planning financially and maintaining a favorable credit profile:

Here are some behaviors you could develop over time to help boost your credit score. Keep in mind that you may not be able to learn all of these skills in one day. Slowly but surely, work on building strong credit habits and a favorable credit profile, and you’ll realize how much this affects other parts of your life.

The author of this article is Mahesh Shukla, CEO and Founder of PayMe India

The views and opinions expressed are not those of IIFL Securities, indiainfoline.com

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