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TransUnion CIBIL credit bureau creates CIBIL scores by taking various criteria into account, including payment history, credit type, credit age, and other considerations.
Credit score depends upon below 4 factors:
Payment History -- 30%
Credit Exposure -- 25%
Credit Type and Duration -- 25%
Other Factors -- 20%
lets look at major factors :
Irresponsible Payment Behavior -- Your payment history has the greatest impact on your credit score. Every month, it is critical to pay your credit card payments and loan EMIs on schedule. A 30-day delinquent can drop your score by 100 points, according to a CIBIL investigation (published by the Financial Express). If you have many credit cards and loans, it is a good idea to set up reminders and notifications to avoid missing or postponing payments. Any missing or late payments reflect adversely on your credit score and indicate that you are inconsistent in repaying credit.

Making Repeated Credit Applications: Lenders will want to assess your creditworthiness when you apply for a loan or a credit card, and they will do so by checking your credit report. This is known as a hard inquiry. If you submit several applications, numerous credit queries will take place at the same time. These difficult questions are reported and have a negative impact on your score. That makes you appear credit-hungry.

If your loan or credit card application has been refused recently, it is advisable to not apply for credit immediately. It is preferable to enhance your CIBIL score before reapplying.

The Advantages of Having a Good CIBIL Score
Loans and credit cards are approved more quickly.
Loans with lower interest rates
Better credit card offers
Credit cards with increased credit limits
Discount on loan application processing fees and other expenses
It is critical to verify your CIBIL score on a regular basis. To have greater access to loan products, make sure your credit score is over 750. You are entitled to one free full credit report from CIBIL each calendar year.

What is a Hard CIBIL Inquiry Check?

Whenever you apply for a loan or any other form of credit for that matter, the lending partner will pull up your CIBIL credit report to evaluate your financial habits and overall creditworthiness. This helps the lender understand how you would manage your finances if the credit is approved, and thus, avoid default. Since the Inquiries are interlinked with your credit application, they go by the name of hard Inquiries.

What is a Soft CIBIL Inquiry Check?

Soft Inquiries are when a particular agency checks just the borrower’s CIBIL credit score in order to pre-approve them for financial offerings. This usually precedes the promotional messages and intimations that you receive regarding the kind of credit cards or loans you are eligible for from a financial institution. A soft CIBIL Inquiry is also when you check your credit report to either understand your credit behaviour/financial obligations, to check for discrepancies, or simply to check your credit score before applying for a loan.

Impact of CIBIL Inquiry Check on Credit Score

The two aforementioned forms of credit information Inquiry methods impact an individual’s credit score in varying degrees. A CIBIL soft Inquiry, for example, has no impact on your overall credit score.

A hard CIBIL Inquiry check, on the other hand, has an impact on your credit score. As mentioned above, lenders conduct a hard CIBIL Inquiry check when an individual applies for a loan or credit card. This helps them understand your financial obligations and your debt-to-income ratio, thereby evaluating your creditworthiness. Credit bureaus keep tabs on the number of hard credit Inquiries made into a borrower’s credit profile. If the checks are infrequent, there is no impact on your credit score.

However, if multiple creditors go through an individual’s credit report often and in a short timeframe, the credit bureaus would categorise the borrower as credit-hungry. This will, in turn, have an adverse impact on his/her CIBIL credit score. Hence, it is advised to not apply for credit from multiple credit organisations at once as well as to keep an interval of at least three months between applications.

Making frequent applications for a loan from numerous lenders simultaneously is one of the few mistakes that a potential borrower can make

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