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How To Use A Short-Term Personal Loan To Improve Your Credit Score ?


personal loan to build credit scoreA credit score is a 3-digit number generated by credit information agencies such as CIBIL, CRIF ,Experian,Equifax etc ,based on which banks and NBFCs (Non Banking Financial Corporations, such as loan and insurance companies, co-operative banks, stock broking firms, etc.) evaluate a person’s creditworthiness ie their capacity and willingness to repay loans extended to them on time. Based on this assessment companies accept or reject loan applications.

The different credit score ranges and their grades are as follows –

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Free Credit Scores In India


wealthymattersBefore a bank/other financial institute extends a loan to a potential borrower, it needs to take a decision on whether the person would be able to repay the interest and principal or default and how much  risk is involved in lending money to this person. Banks and other financial institutions rely on many factors to take this decision on credit-worthiness – including the person’s income and household income , the person’s other loans and EMIs, the person’s previous repayment history and defaults if any, etc.

In the past, the banks had to collect all this information from a potential borrower before analyzing it. But now, they make use of   credit reports and credit scores. A few years ago, the only credit reports and credit scores available were from CIBIL. At the time, I wrote about interpreting the CIBIL CIR and improving the Credit Score and How a Good Credit Score improves one’s chances of securing a loan on better terms. Link. Link.Link. Read more of this post

Dealing With Credit Card Fraud


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About Your CIBIL TransUnion Score


The CIBIL TransUnion Score is India’s first credit score for individuals.It is a three-digit numeric summary (ranging from 300 on the lower side to 900 at the higher side) of a consumer’s credit history, compiled from information received from lenders who are members of CIBIL. The model followed by CIBIL predicts the likelihood of an individual missing more than three payments on a credit line over the next 12 months. For the last few years banks have had exclusive access to this score.Now individuals too can access their CIR and credit score for Rs450.

To understand the impact of the CIBIL TransUnion Score on an individual’s loan application we need to take a look at the table below.It shows loans sanctioned by loan providers based on an individual’s CIBILTransUnion Score in 2008 and 2010.

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