There are different credit bureaus in India, of which the CIBIL is the most popular one. The other credit bureaus licensed by the Reserve Bank of India are Highmark, Equifax, and Experian. The most popular credit bureau, CIBIL, maintains credit files of around 32 million businesses and 600 million individuals. The Credit Information Bureau (India) is a part of an American Multinational group called TransUnion. Therefore, sometimes credit scores are also known as TransUnion scores. This blog will discuss everything related to the CIBIL score in HDFC bank or CIBIL Score Check free.
What is the CIBIL score in HDFC Bank?
The account-related information of the HDFC bank customers is summarised in the form of a three-digit numeric code called CIBIL. Your credit score is a summary of your repayment history collected from a number of sources, including credit card companies, banks, and collection agencies. The code ranges from 300-900.
Your credit score is calculated on the basis of a mathematical algorithm applied to your credit information and denotes your mircari creditworthiness. The higher your CIBIL score in the CIBIL Score App, the more your credit rating and the more creditworthy you are. The significance of the HDFC CIBIL score is better understood when you apply for a loan at the HDFC bank. The closer your score is to 900, the higher your chances of getting the loan approved without hassle.
A good CIBIL score can’t be developed overnight. It takes time, patience, and financial discipline. It usually takes around 18-36 months of credit card usage to obtain a decent CIBIL score.
Why is the CIBIL credit score important?
As mentioned earlier, the CIBIL score plays an important role in the loan approval process. When you approach HDFC bank or any other bank for a loan, the first thing the lender checks is your CIBIL score and report. If your CIBIL score is too low, your application will likely get rejected immediately. If the CIBIL score is satisfactory, other details are evaluated to determine if you are creditworthy.
Therefore, your credit score serves as a primary impression for the lender. The better your score, the higher your chances of getting a loan reviewed and approved. You will also be better positioned to negotiate favorable terms and interest rates on the loan amount. However, it is important to note that the decision to lend money completely depends on the financial institution, and CIBIL does not decide anything in the process.
What are the factors that affect credit scores?
Although many factors determine your credit score, your payment history is the most important one. Following are the other factors that decide your credit score:
- Payment history: If you pay off your credit card bills and EMIs on time, you will have a higher credit score. Any irresponsibility in the same will adversely affect your credit score.
- Credit utilization ratio: A credit utilization ratio of more than 30% is considered unsatisfactory and can adversely affect your credit score.
- Outstanding debt: Your credit score will drop if you have outstanding debts or due amounts on your credit card.
How to Improve Your Credit Score?
With mindfulness and good financial management, you can improve your credit score. Following are some tips you can follow:
- Pay your EMIs and credit card dues on time. If you tend to forget their due dates, you can set reminders to help you with the same.
- Hold on to your older credit cards to lengthen your credit history.
- Maintain a healthy credit utilization ratio and control your credit usage
- Avoid taking a high amount of loan at once and pay your older dues before going into further debt.
- Don’t go for only unsecured loans. Rather, maintain a healthy mix of secured and unsecured loans.
- Perform a CIBIL Score Check free via the CIBIL Score App every now and then to make sure there are no mistakes
A strong CIBIL score will help you avail of HDFC Bank personal loans whenever you meet a financial challenge. Therefore, you must take steps to achieve a good credit score and maintain a good credit history. We hope this blog helped you with all the information you needed on the HDFC Bank CIBIL score. Check your CIBIL score with the free CIBIL Score App and keep track of your score.