Understanding Your CIBIL Score
In India, credit scores range from 300 to 900. Lenders consider 750+ the benchmark for the lowest home loan interest rates.
The 5 Factors:
1. Repayment History (35%): Timely payments with zero late marks.
2. Credit Utilization Ratio (30%): Spending less than 30% of your total credit limit.
3. Credit Age & Mix (15%): Length of credit history and balance between secured (home) and unsecured (card) loans.
4. Recent Hard Inquiries (10%): Applying for multiple loans simultaneously.
5. Loan Settlements/Write-offs (10%): 'Settled' accounts severely penalize scores.
The 4-Step Self-Repair Protocol
1. Pull Official Free Reports: Download your free annual report directly from cibil.com.
2. Raise Free Online Disputes: If an old closed account is marked active or overdue, file a formal dispute on CIBIL’s dispute portal. By RBI rules, banks must resolve it within 30 days.
3. Cap Utilization at 25%: If your card limit is ₹1,00,000, never let statement balance exceed ₹25,000.
4. Get a Secured Credit Card: If traditional banks reject you, open a ₹25,000 Fixed Deposit and get a secured credit card (e.g., IDFC WOW, OneCard). Pay small monthly utility bills and clear in full to create 12 consecutive green payment ticks.