What is CIBIL SCORE and Why it important?
Credit Bureau Information (India) Limited(CIBIL) is most famous and one of the four significant credit score information businesses.There are three other companies aslo licensed by the RBI to function as credit information companies.
CIBIL Score is a three-digit number ranging between 300 and 900, whom published by TransUnion CIBIL. It collates and stores credit-related information from banks and NBFCs about individuals and corporate houses. Then, based on the available data and the credit history, it prepares a report and issues credit scores.
Who make your credit score?
Your CIBIL score is mainly depend on following factors-
Credit Exposure (25%)
Credit manner and Duration(25%}
Importance of Credit score
Your credit health is captured in your Score. it gives lenders a picture of your capacity to repay the borrowed sum.
Based on previous repayment history or defaults, these figure assists lenders in determining the borrowers’ capability to repay the loans. These are the most dependable and accurate metrics for determining a person’s creditworthiness.
Borrowers with a higher CIBIL score may get higher loan terms than those with a lower score.