Who issues a credit score to applicants or organizations?

cibil credit score

Ever wondered who are the authorities that provide you with a credit score or a credit rating? The Reserve bank of India (RBI) has authorized some credit bureau that judges and records all of our financial data. The credit bureaus of India, authorized by RBI, are Equifax, Experian, CIBIL and HighMark. Each one of these agencies provide true and accurate information about your credit ratings. India’s oldest and the most trustable organization to check your credit score is the CIBIL. The CIBIL scores were settled to be the most authentic one at that. However, currently it is compulsory for all lenders to submit the financial information to all these four credit bureaus. Let us learn more about the credit score below.

What is a credit score?

The credit score is basically a representation of your financial records, debt history, repayments, credibility, creditworthiness and other related terms. It is used for the organization to determine whether the individual is worth of a debt or not. It is a numerical representation with numbers ranging between 300 and 900. The lower your score, the worse your credit ratings. However, the more you are to the score of 900, the better you are as a borrower in the eyes of the lender.

So, this is the way in which your credit score works. If you want to obtain a personal loan, it is mandatory for you to maintain a good credit score. As a personal loan is an unsecured one, lenders have only the applicant’s credit score to check his repayment capacity. Even in the case of secured loans, lenders see credit scores as a very considerable factor. 

What factors affect your credit score?

The factors that can affect your credit scores are mentioned below. Read and better avoid these factors to happen.

  • Payment History
  • Repayments pattern
  • Ratio of secured and unsecured loans
  • Length of debt
  • Total amount owed

How can you check your credit score?

You can check your credit ratings at any one of the credit bureaus of India such as CIBIL, Equifax, HighMark or Experian. You can check your free CIBIL scores at any one of these credit bureaus only once in a year. If you want to check your scores more than once a year, you need to pay a certain amount to avail the subscription service. To check your credit score, you need to register and log in on the official websites of any of these four credit bureaus. After registering, you need to fill in your details and request for your credit score.

How to avoid decreasing your credit score?

You need to be careful of certain facts to avoid decreasing your credit scores. Here are some of the tips to maintain your credit scores-

  • Always pay your bills and EMIs in a timely manner.
  • Do not be overconfident about your credit scores and always check your scores on a regular basis.
  • Maintain a balance of secured and unsecured loans.
  • Do not close old accounts as it will help you to get a longer debt history.
  • Do not apply for too much debt in a very short period.

The Bottom Line

Your credit score is regarded as a reliable reflection of your credit standing. The amount and types of loans you have like best credit cards in India, your existing debt, and the length of your credit history all factor into your CIBIL score or Equifax score. Lenders will be more willing to lend to you if you have a good track record backed by a good credit score (whether it’s a CIBIL score, Equifax score, Experian score, or HighMark score). It doesn’t matter if your credit score is from which bureau, what matters is your credibility. Remember that and go for a hassle free loan experience.

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