Learn how to check and improve your CIBIL Score as a first-time borrower to secure better loan terms and financial products.
As a first-time borrower, understanding your CIBIL Score is crucial. This three-digit number helps lenders assess your creditworthiness, affecting your ability to secure loans, credit cards, and other financial products. Whether you’re buying your first car or applying for a credit card, your CIBIL Score plays a key role in approvals. If you’re new to credit, you may be unsure about how it works or how to check it. You can check your CIBIL score for free on Bajaj Markets, which also provides tools and resources to help you build and improve your score.
What is a CIBIL Score
A CIBIL Score is a three-digit figure that indicates your credit reliability, with values spanning from 300 to 900. It helps lenders assess the risk of lending you money, with higher scores indicating better creditworthiness. Your score is influenced by factors like payment history, outstanding debt, types of credit, and credit history length. For first-time borrowers, a good score opens doors to better loan terms and lower interest rates, while a poor score may limit your options. You can check your CIBIL score for free to get a clear understanding of your credit standing and improve your financial future.
How is Your CIBIL Score Calculated
Here’s a breakdown of how your CIBIL Score is calculated, highlighting the key factors that impact your creditworthiness and influence your loan approval chances.
Payment History (35%)
This is the most important factor, as it shows lenders whether you consistently make timely payments on your debts.
Credit Utilisation (30%)
The proportion of your available credit that you use impacts your score, with lower utilisation indicating better financial health.
Length of Credit History (15%)
A longer credit history is beneficial, as it demonstrates experience in managing credit, which is especially important for first-time borrowers.
Types of Credit (10%)
Having a mix of credit products, like credit cards and loans, is seen as a positive sign of responsible credit management.
New Credit (10%)
Frequent applications for new credit within a short time can signal financial distress and negatively affect your score.
How Can First-Time Borrowers Check Their CIBIL Score
Here’s how first-time borrowers can easily check their CIBIL Score and stay on top of their credit health:
- Go to a reliable platform like Bajaj Markets that offers free access to your CIBIL Score
- Create an account or log in to the platform using your email ID and basic details
- Enter the required personal information, such as your name, date of birth, and address, to verify your identity
- Once your details are verified, you can instantly view your CIBIL Score and credit report
- Regularly check your score to track your progress and take necessary steps to improve it
How to Improve Your CIBIL Score
Here are some effective steps to improve your CIBIL Score and boost your creditworthiness:
Pay Your Bills On Time
Consistently paying your bills, loans, and credit card payments on time is the most important factor in improving your CIBIL Score.
Keep Credit Utilisation Low
Try to use less than 30% of your credit limit to show lenders that you are managing your finances responsibly.
Reduce Outstanding Debt
Paying off high-interest debt and reducing outstanding balances helps improve your credit score over time.
Avoid Multiple Credit Applications
Minimise applying for new credit accounts, as frequent applications can lower your score.
Keep Old Accounts Open
Keep older credit accounts open to benefit from a longer credit history, which positively impacts your score.
Check Your Credit Report Regularly
Review your credit report for errors or discrepancies and resolve them promptly to avoid negative impacts on your score.
Conclusion
Your CIBIL Score is essential for first-time borrowers, influencing your ability to secure loans and credit. By understanding how it’s calculated and regularly checking your score, you can make informed decisions to improve your credit. With time and careful management, you can unlock better loan terms and financial opportunities.