A Comprehensive Guide to Transunion CIBIL Score Checking Process and Tips For Improving It

Two sisters, Ritika, and Priya, sat down for their routine evening tea. As they sipped on chai, Ritika brought up an interesting topic she had recently learned about—TransUnion CIBIL scores.

Ritika: “Hey Priya, have you ever checked your TransUnion CIBIL score?”

Priya: “CIBIL score? What’s that?”

Ritika explained that a CIBIL score is a three-digit numeric summary of one’s credit history. It ranges from 300 to 900, with a higher score indicating a healthier credit profile.

Intrigued, Priya asked, “But why does it matter?”

Ritika, now the de facto financial expert, listed ten benefits of maintaining a good CIBIL score, emphasising their significance –

Low-interest rates

Good credit scores are rewarded with lower interest rates on loans and credit cards. Lenders consider borrowers with high credit scores less risky, and, therefore, offer them more favourable interest rates as an incentive.

Loan approval

A high CIBIL score significantly enhances the likelihood of loan approval. Lenders view a good credit score as an indicator of creditworthiness, assuring them that the borrower is likely to repay the loan on time.

Credit card approval

Individuals with good credit scores find it easier to get approval for credit cards. Moreover, they often qualify for credit cards with attractive benefits, such as cashback rewards, travel perks, and low annual fees.

Negotiating power

A high CIBIL score gives borrowers negotiating power. They can leverage their good credit standing to negotiate better terms on loans, including lower interest rates, flexible repayment terms, and reduced fees.

Faster loan processing

A good credit score expedites the loan processing time. Lenders trust borrowers with high credit scores, making them more likely to streamline the approval process for quicker access to funds.

Insurance premiums

Credit scores can influence insurance premium rates. Individuals with higher credit scores may be eligible for lower premiums on various insurance policies, such as life insurance and car insurance, as insurers perceive them as lower-risk clients.

Employment opportunities

Some employers consider credit scores during the hiring process, especially for positions involving financial responsibilities. A good credit score can reflect positively on an individual’s reliability and financial discipline.

Renting a house

Landlords often check CIBIL scores before renting out properties. A good credit score can enhance one’s rental application, as it demonstrates financial responsibility and a history of meeting financial obligations.

Financial discipline

Maintaining a good credit score is a testament to financial discipline. It shows that an individual is responsible for managing credit, making timely payments, and overall, maintaining a healthy financial profile.

Higher credit limits

Those with excellent scores are more likely to be offered higher credit limits on their credit cards. This not just offers higher financial flexibility but even shows the confidence that lenders have in the ability of individuals to manage credit in a responsible manner. 

Intrigued by the benefits, Priya wanted to know how to check her TransUnion CIBIL score.

Ritika explained the stepwise process, focusing on the SBI CIBIL score check, as the State Bank of India is a prominent financial institution –

Visit the CIBIL website

Log on to the official TransUnion CIBIL website.

Fill in personal details

Enter personal information as required.

Authenticate identity

Provide the necessary documents for identity verification.

Choose subscription plan

Select a subscription plan for accessing the credit report and score.

With Priya’s CIBIL score in front of them, Ritika shared top tips to improve and maintain a healthy score –

Avoid multiple credit applications

Each credit application can result in a hard inquiry on your credit report, which may slightly lower your score. Applying for credit too frequently can be seen as a sign of financial distress. It’s advisable to only apply for credit when necessary.

Pay bills on time

Timely payments are crucial for a healthy credit score. Late payments, even if just a day overdue, can negatively impact the score. Consistent on-time payments demonstrate financial responsibility and reliability to creditors.

Monitor credit utilisation

Credit utilisation is the ratio of your credit card balances to the credit limit. Keeping this ratio low, ideally below 30 per cent, reflects positively on your credit score. It shows that you are not overly reliant on credit and can manage your finances responsibly.

Check for errors

Regularly reviewing your credit report helps in identifying and rectifying any errors or inaccuracies. Errors can include incorrect personal information, unauthorised accounts, or inaccurately reported late payments. Addressing these issues promptly is essential for an accurate credit profile.

Close unused accounts

While having a diverse credit mix is beneficial, too many open accounts can be risky. Closing unused or redundant accounts can simplify your financial portfolio and reduce the potential for misuse or identity theft.

Diversify credit mix

Having a mix of different types of credit, such as credit cards, instalment loans, and retail accounts, can positively impact your credit score. It demonstrates your ability to manage various forms of credit responsibly.

Limit credit inquiries

Excessive credit inquiries within a short period can signal financial distress. It’s important to be selective and strategic when applying for credit and avoid unnecessary inquiries that may impact your score.

Avoid settlements

Settling for less than the full amount owed may be recorded on your credit report and can negatively impact your score. It’s generally advisable to negotiate payment plans or settlements carefully to minimise the impact on your credit.

Settle outstanding debts

Clearing outstanding debts, especially high-interest debts, is essential for improving your credit score. It not only reduces your overall debt burden but also showcases your commitment to financial responsibility.

Don’t max out credit cards

Carrying high balances on credit cards relative to their limits can be a red flag. It’s recommended to keep credit card balances well below the credit limits to demonstrate responsible credit usage.

Emergency fund

Maintaining an emergency fund provides a financial safety net for unexpected expenses. It prevents you from relying on credit for unforeseen circumstances, showcasing financial preparedness to creditors.

Financial planning

Planning your expenses and budgeting effectively ensures that you can meet your financial obligations without relying heavily on credit. A well-thought-out financial plan contributes to overall financial stability.

Avoid guarantorship

Being a guarantor for someone else’s loan makes you equally responsible for the debt. If the primary borrower defaults, it can impact your credit score. Consider the risks carefully before agreeing to be a guarantor.

Seek professional advice

Consulting with financial advisors provides personalised guidance tailored to your specific financial situation. Professionals can offer insights, strategies, and recommendations for improving and maintaining a healthy credit score.

Regularly monitor your score

Keeping a vigilant eye on your credit score allows you to detect any changes or anomalies. Regular monitoring allows you to address issues promptly and ensures that your credit profile accurately reflects your financial behaviour.

As the sisters delved into these financial insights, they realised the importance of being financially savvy.

Towards the end, Ritika smiled and said, “Priya, managing our CIBIL scores is like tending to a garden. With care and attention, we can watch our financial garden bloom with opportunities.”

And so, with newfound financial wisdom, Ritika and Priya continued their journey towards financial well-being, one CIBIL score at a time.


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