5 Important Reasons to Check Your CIBIL Score Regularly

Your CIBIL or credit score is an indicator of your creditworthiness, and lenders take it very seriously. This three-digit credit score is a representation of your financial health, specifically related to your credit activities and history.It ranges between 300 and 900 and is commonly used by banks, NBFCs and other financial institutions to check your eligibility for credit. Most lenders prefer to offer loans to applicants with a score of 750 or above. With that in mind, knowing how to increase your CIBIL score is important.Read on to know how you can run a free CIBIL score check and why monitoring it regularly is good for your financial health.To Ensure You Give Yourself the Best Chance of ApprovalConsidering that the credit score is a primary requirement for many lenders, it is the first factor they assess. It highlights your experiences with credit and your creditworthiness for new credit.This is why a CIBIL score of 750 is usually the minimum required whenever you apply to borrow from any bank or financial institution. It is considered an excellent score, and indicates financial responsibility. Only those who have efficiently and earnestly managed their credit have a CIBIL of 750 or higher.Naturally, lenders prefer applicants to have a high score when applying. So, if you want to improve your chances of getting approval, CIBIL score check is recommended. This will help you know your score and give you an idea of whether or not you make the cut.For instance, if your CIBIL score is 650 and the minimum requirement is 750, wait before you apply. You score may increase in the coming months, and this will give you a better chance of approval. Had you not run this check before applying, not only would your chances at approval be lower, but it is very likely that you would get unfavourable rates, if approved.Constantly keeping an eye on your credit report can help you avoid such issues. Moreover, if you notice an unwarranted dip, you can get it rectified immediately. To Keep Your Credit Report Error-freeErrors in the credit report are not uncommon and many of these occur when lenders or financial institutions fail to report information accurately. Depending on the information, the severity of such errors can vary.For instance, an error in your address isn’t as worrisome as an error in your name or the status of a loan account. The latter from the two is particularly concerning as it could mean that you haven’t fully serviced a loan.Naturally, such errors can lower your score significantly, if left unchecked. Frequent CIBIL score checks can help steer clear of such problems, as you can catch them early and raise a dispute. On the other hand, errors with your personal information should also get rectified immediately.You can raise these requests online and send copies of official documents as proof to get them rectified right away. To Maintain and Systematically Improve your Credit ScoreBuilding your credit score is relatively easy but it takes time. You need to put in the effort month after month, and consistently work to maintain your score. This is why regular checks are important, as it highlights progress or dips, if any.Based on the financial action that causes a shift, you can learn and identify ways to improve your score. Over time, this will help you inculcate the right financial habits and approach your finances in a more calculated way. To Identify Fraudulent Activities, If AnyIdentity fraud with PAN numbers is a serious issue and it is not uncommon. By using your PAN card number, fraudsters can access your personal information. They can also use your identity as a false alias.Imposters may also attempt to defraud lenders by using your information to open new credit accounts or sign up for services. Thankfully, by checking your score regularly, you can verify new inquiries into your profile. In the event that you notice something unfamiliar, you can always report it and put a stop to it right away. How to Check Your CIBIL ScoreChecking your CIBIL score is a straightforward process. You can conduct a free CIBIL score check on the official CIBIL website with a few simple steps.Step 1: Visit the official CIBIL website and click on “GET FREE CIBIL SCORE & REPORT”Step 2: Create your account by entering basic detailsStep 3: Verify your inputs and click on “ACCEPT & CONTINUE”Step 4: Enter the OTP to authorise your identityStep 5: Access the dashboard and download your credit report to view your scoreDo note that you may get the option to do a free CIBIL score check only once a year, on the official website. For any checks in the future, you may have to choose one of the subscription plans.How to Increase Your CIBIL ScoreNow that you know why regular updates in CIBIL score are required, the next step is to understand how to increase your CIBIL score. The easiest step will be to clear the existing debt. You can use auto debit and reminders to make payments on time for payment.With the regular and timely payment of debut, your CIBIL score will grow steadily every month. Opting for a longer tenure on your loan ensures everything runs smoothly in EMI payment. If your credit score is low, don't apply for a loan. This can lower your score further.Moreover, if you are using credit cards, prioritise paying the bill on time and in full. Avoid minimum payments as this can increase the chances of defaulting in the future. You should also borrow only as much as you can comfortably handle.Lastly, apply for different types of loans for higher credibility. Too much unsecured credit without any secured options can hamper your score. If you are planning to apply for a loan, then it is wise to check your credit score. This way, you will know where you stand, and can take measures to improve it, if needed. With a high CIBIL score, you can not only get more affordable credit, but also a higher loan amount or credit card limit.This is why tracking your CIBIL score is important, and make sure you do so at regular intervals. Lastly, a good score can not only bridge financial gaps with ease but also develop the right habits when it comes to credit management.This is a Partnered Post.