Now you can also calculate your ‘CIBIL Score’ yourself! Just understand these ‘4 Factors’ and improve your credit score:

Let us tell you that the better the score, the greater will be the chances of getting a loan. Looked at this way, you can improve your transactions by managing them properly. However, before that it is important to understand how the CIBIL score is calculated.

‘Payment history’ plays an important role in your CIBIL score. This also includes whether you have paid your loan or credit card EMI on time or not. If there have been delays, how many times and for how long? Additionally, the number of missed EMIs is also taken into account, which contributes about 30% to the score calculation.

Next, the total credit limit in your name and how much you have utilized is considered. This is called ‘credit exposure’. If you overuse your credit limit, it has a negative impact on your CIBIL score. This factor contributes approximately 25%.

While creating the CIBIL score, the type of loan you have, ‘secured or unsecured’, is also considered. If you have secured loans (like home loans and car loans), your score will be good. Furthermore, the tenure of the loan is also important. The longer and better your credit history, the better your credit score is considered. This factor also contributes about 25%.

The remaining 20 percent of your score is affected by your other credit activities. It takes into account how many new loans you have taken recently, how many accounts you have opened or closed, and what your ‘credit utilization ratio’ is. Keep in mind that this ratio should not exceed 30-40 percent, otherwise your score may fall.