Every consumer now relies on credit cards and loans to assist them in accomplishing their aspirations and financial objectives. Intriguingly, the consumers’ credit profiles will likely be reviewed by potential lenders before approval for any loan, as is the norm. This pinpoints the significance of having profound knowledge of one’s credit profile context. This might enhance the chances of a consumer getting approval for the targeted loan at minimum interest rates.
One must remain informed and updated regarding their credit record. In the modern era, CIBIL score and credit score apps are the two preferred choices that help consumers analyse their creditworthiness by learning about their credit score, record, and history, among other things. This article aims to highlight the crucial roles that a consumer’s CIBIL score and credit score apps play in their quest for loans.
CIBIL stands for “Credit Information Bureau (India) Limited.” The three-digit CIBIL Scores, which range from 300 to 900, serve as a representation of a consumer’s credit score.
TransUnion CIBIL was initiated in the year 2000 and operated in India. With one of the largest databases of consumer data, TransUnion CIBIL is India’s top provider of credit information. TransUnion CIBIL Limited calculates, monitors, and maintains the CIBIL score. Furthermore, the Credit Information Report (CIR) determines the CIBIL score. CIR provides us with a record of credit cards, personal data, contact details, employment information, loans, unpaid balances, repayment delays, late fee amounts, and inquiry information. Importantly, the CIBIL score is calculated by certain key parameters, including repayment record, credit utilisation ratio, credit mix, duration of credit and credit inquiries.
Benefits of a CIBIL score
In essence, CIBIL scores are a way to determine whether a person can be trusted to make timely payments. Most lenders favour applicants with credit scores of at least 720 and above. The likelihood of receiving quick approval declines as your credit score falls. Several actions, such as numerous inquiries and turned-down credit applications, can have a negative impact on a consumer’s credit score. A high CIBIL score is thus an indication of a consumer’s history of responsible credit-related behaviour, which can encourage the lender to approve a loan. Conversely, having a poor credit history might mean higher interest rates or even be turned down for a loan.
Credit score apps
Credit score apps are valuable for timely CIBIL score checking and monitoring. However, by logging into the CIBIL website, one can view their CIBIL score. Depending on the subscription plan, this is a paid service that may run a person between Rs. 550 and Rs. 1,200. There are many credit score tracking apps available, and many of them even provide completely free-of-cost services. For instance, Capital One’s CreditWise, Credit Karma, and Mint. Some credit score apps offer free basic plans but charge money via subscription for their premium modes, such as Experian CreditWorks, myFICO, TransUnion, and Credit Sesame.
Benefits of Credit score apps
Numerous credit score apps are prevalent to choose from as they provide many services to consumers, some of which are enlisted below.
- Send notifications for any significant alterations to the consumer’s credit report.
- Organised breakdown of the credit score.
- Specific recommendations for raising a credit score.
- Information on the usage of a credit card account, any outstanding debt, and the impact of that use on the consumer’s credit score.
- The amount of credit a person can likely access is based on their current score and account details.
The type of service provided to consumers might differ from one credit score app to another. For choosing a credit score app, we can assess its pricing, services provided, the number of credit bureaus surveyed, and the promptness of updates.
CIBIL score is a snapshot of a consumer’s credit-related history, thereby determining their loan eligibility. In addition, CIBIL score app come in handy to let consumers know about their credit-related information as lenders access the borrower’s credit report before lending loans, so one must have in-depth knowledge about their CIBIL scores.