You may have come across numerous promotions asking you to check free credit score online while reading the news, using a financial app or when applying for a loan, and wondered what this means or why it is important to do so. The first aspect to understand is that your credit score can help you get a loan at affordable and desirable terms, helping you save money when it comes to repayment.
Since affordability is key to borrowing smart and catering to your financial health, checking and boosting your credit score should be on your list of healthy financial habits. To know more about how to understand your score, how to check free credit score online and what is control number in CIBIL, read on.
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What is your credit score?
Your credit score is a number that displays how creditworthy you are as a borrower. This score is based on your history with credit, which includes how timely you were with repayment, how much you borrowed and how often, what kind of loans you have taken to date, and other related factors. This score is assigned to you by credit information companies like TransUnion CIBIL. Since CIBIL was India’s first credit information company, its score is popularly referred to by both lenders and borrowers. This is why your credit score is sometimes referred to as your CIBIL score.
Your CIBIL score is a number between 300 and 900 and assigned to you based on the data mentioned in your Credit Information Report (CIR), specifically the information present under the Accounts and Enquiries sections. Here’s more on what these sections consist of:
What comes under Account Information in your CIR?
This section lists the monthly record, going back up to 3 years, of all the loans and credit cards you have in your name. Here, you will find the name of the credit facility you have opted for, such as a home loan or car loan, the lender’s name, the date you have taken the loan or credit card, the latest payment date, and the existing debt you need to pay off. It also notes any missing payments of EMIs or credit card bills.
What comes under Enquiry Information in your CIR?
This section lists the lenders requesting information about you as a borrower when you apply for credit. The various credit facilities as well as the estimated loan amount you have applied for can be seen here. For a prospective lender, this section is important because it shows how often you have applied for credit and how many new loans you have been approved for as it helps them check if you can repay additional debt.
How is credit score calculated?
It is important to understand the 4 main aspects of your credit history that make up your score in order of their importance.
- Your history with payments: Timely payments boost your credit score, and defaults or late payments lower it. So, pay your EMIs and credit card bills on deadline to increase your score.
- Your frequency of loan enquiries: Many loan enquiries in a short period indicate that you are unable to manage your finances or spending more than you can manage. This lowers your score. Remember, numerous and simultaneous loan or credit card applications make you look credit-hungry.
- Your credit utilisation behaviour: Your dependency on credit is measured here by seeing if you’re using all or most of your credit limit. Balanced utilisation of credit boosts your sore.
- Your experience with different types of credit: Also called a credit mix, this section highlights if you have repaid both secured and collateral-free loans. This helps lenders see if you’re an experienced borrower or not. A good credit mix increased your CIBIL score.
All these aspects contribute to your score, and the score helps lenders decide what your probability of default is likely to be. Usually, a good score is regarded as one that is 750 and above, which means the probability of default is low. This helps you get a competitive rate of interest on a loan, be it unsecured or secured, and help you access the loan amount you want. This is why checking your credit score is important before you apply, so you can understand where you stand. This also helps you work towards improving your score and then applying for a loan to get a better deal.
How to check free credit score online?
You may check your credit score for free online in two ways:
On the CIBIL website
Check your score for free once annually on the CIBIL website by following these easy steps.
- Click ‘Get Your Free CIBIL Score & Report’
- Create an account by entering your name, email ID, pin code, mobile number and attaching an ID proof online
- Click ‘Accept & continue’ and enter the OTP sent to your phone
- Click ‘Go to Dashboard’ and you’ll be able to check your CIR and credit score
If you want to check your score more than once a year, you will need to pay the subscription fees.
On the Bajaj Finserv website
Check your score for free on the Bajaj Finserv website any time without needing to create an account by following these simple steps.
- Click ‘Get Your CIBIL score’
- Enter your name, PAN number, city and employment type as per your official ID proof
- Enter the OTP sent to your phone number and email
- Access the CIBIL score and report
What is control number in CIBIL?
Another aspect to keep in mind while you check free credit score online is that CIBIL itself gives you loan offers from various lenders that are customised to your score when you log in using your CIBIL score and control number. The control number is a 10-digit number that is mentioned right at the top of your CIR and you may think of it as a unique ID number.
It is important to understand that as per CIBIL, the number of new loans approved by lenders as per score is as follows:
- For borrowers with a score between 750 and 799: 22.8%
- For borrowers with a score between 800 and 900: 57.6%
Taken cumulatively, this means that more than 80% of new loans have been offered to those with a score above 750.
While CIBIL score isn’t the only aspect that lenders check before approving your loan application, it definitely is one of the important terms of any lender’s eligibility criteria. When you have a good CIBIL score and want to apply for a collateral-free loan whose eligibility criteria are easy to meet, opt for the Bajaj Finserv Personal Loan. It offerss you up to Rs.25 lakh in as few as 24 hours with a simple online application.
