CIBIL score is calculated by TransUnion CIBIL credit bureau. Lenders such as banks and non-banking finance companies submit your credit information to credit bureaus every month or 30-45 days. Sometimes, non-traditional lenders or private lending companies share your credit data to the credit bureau twice a month or on a quarterly basis. It should be noted it may take lenders more time more days to share your credit information to the bureau. Therefore, if you have paid your credit card bills on time, it may still take time to reflect on your credit report. Also, the date that each lender sends information to a bureau will differ.
Meanwhile, if you have raised a dispute with CIBIL regarding a credit transaction or any error in your credit report, it will take around 45-90 days to resolve your dispute. You should make sure that the credit report is updated and does not have wrong credit information. When you apply for a loan or a credit card, lenders pull out your credit report to measure your creditworthiness. If you have a low credit score, lenders will not approve your loan application.
Each credit bureau in the country have their own proprietary algorithm they use to calculate your credit scores. Therefore, it is most likely that you will have different credit scores from different bureaus.Therefore, it is important to check your credit report/CIBIL report from time-to-time. You can check your credit report for free on BankBazaar. At the same time, you are entitled to get one free detailed credit report in a calendar year. As there are four main credit bureaus in the country, you can get 4 credit reports in a year.
A credit score is made of five main factors and each of the them have a weightage.
- Payment history
- Length of the credit
- Credit Exposure
- Credit Inquiries
Tips to improve your credit score:
- Fix your late payments and pay all your debts and clear outstanding dues if any.
- Make sure to pay your credit card bills and loan EMIs on time and avoid late payments.
- You should use up to 30% of your credit card limit and maintain a low credit utilisation ratio.
- Limit the number of credit inquiries and instead spread them throughout the year.
- Check your credit score form time-to-time.
- Avoid closing old credit cards that have a long credit history and a consistent repayment behaviour.
- Try and increase credit limit on your credit card.
- Always pay the credit card bills in full and avoid going for minimum balance due.
- Maintain a healthy balance of secured and unsecured loan.
- Monitor your credit report and look out for any errors. You can raise a dispute with the credit bureaus and fix the errors at the earliest