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Simply put, the credit score of an individual is the numerical representation of their creditworthiness based upon their credit history. The 3 digit number, ranging from 300 to 900, helps the financial institutions determine whether any form of credit should be given to the individual, as mandated by the notification of Reserve Bank of India. It also helps these institutions make decisions on other related points as well like period of repayment and rate of interest among other things.A good credit score makes availing credit from any institution much easier and therefore is a vital metric in ensuring one’s financial health. The closer your score is to 900, the more credible you are as a borrower and hence loan approval becomes easier and the terms of repayment as well as the rate of interest can be significantly lower in this case. Conversely, a low credit score depicts risk and unreliability as far as being a borrower is concerned which may influence the decision of the banks adversely. Know what your credit score says about you here.A credit score accounts for all your credit history but does not include any part of your investment portfolio. According to CIBIL, the factors that affect credit score include:

• Repayment history which accounts for default in payments, delays, etc
• Loan enquiries and status which would include all the hard enquiries made in the recent past. In case you have applied or have availed credit multiple times in a short span of time, it can adversely affect your credit score.
• Credit mix between different kinds of loans such as unsecured and secured. A healthy balance ensures a higher credit score.
• High credit utilisation can signify a debt management crisis and hence can adversely affect your credit score.

The credit score is not a static concept and can keep changing, for the better or for worse. Borrowers can keep in mind several tips and tricks to preserve their credit score or even improve their credit scores.

Simply download and install the Fibe app to find your credit score for free. Once you’re done, you can even avail a personal loan upto Rs 5,00,000 at interest rates as low as Rs 9/day. The process involves zero physical documentation, instead relying on just a few taps on your smartphone. It also doesn’t eliminate you based on your credit score. So apply today via the best online personal loan app and get your personal loan amount disbursed right into your bank account.
Instead of only a credit score, here’s what you need to get started with Fibe’s instant personal loans:

• Aadhar front+ Aadhar back
• Driving license front+ Driving license back
• Passport front+ Passport back
• Voter ID front+ Voter ID back

Along with this, submit a photograph with your PAN card and your latest salary slips all in pdf format. And that’s it!

The calculation of credit score was mandated by the promulgation of Credit Companies (Regulations) Act in 2005 in India to curtail the possibility of banking frauds as well as to provide security to the financial institutions with respect to the repayment of the loans. In pursuance of the same, several credit information agencies were created in India which were registered with the Securities and Exchange Board of India (SEBI). As per the SEBI regulations, 1999, these agencies are authorised and regulated by SEBI. As of today, there are 9 such agencies in India:

• Credit Information Bureau India Limited
• Credit Rating Information Services of India (Limited)
• Investment Information and Credit Rating Agency of India
• Credit Analysis & Research Limited
• Onida Individual Credit Rating Agency of India
• SME Rating Agency of India Limited
• Brickwork Ratings India Private Limited
• Equifax Credit Information Services Private Limited, ECIS
• Experian India

All these organisations are highly reliable and have a team of competent professionals and a sound system of evaluation which helps correctly assess the risk involved while extending a credit to individuals and facilitate the easier transaction of loans and credit cards.

Since credit score can be a crucial metric for one’s financial portfolio, it's important to know your credit score. Several portals offer a free credit score check. For instance, you can visit the Fibe website or app and check your credit score for free

A credit score says a lot about an individual. Since the credit score of an individual is associated with his/her credit history, it is important to know the same before making any major financial decision, especially if it involves credit in any form. Some of the reasons why you should continually check your credit score are:

• In case there is any discrepancy or error as to your financial history, you can approach the concerned authorities and get it rectified. For instance, you can check that only the hard enquiries that you have initiated are mentioned and none other.
• In case of a low credit score, you can make amends and start taking steps to repair your credit score
• In case you are applying for a loan, a good credit score can help you get an approval easier as well as faster. In addition to that, it also helps you get a lower interest rate and a more flexible repayment option.

There are several other advantages of having a good credit score.

Here, an enquiry about your credit score is not to be taken simplistically. Simple checking your credit score online is not what constitutes an “enquiry” and you can do so as many times as you want. It has no impact on your credit score whatsoever.

Essentially, whenever you apply for any form of credit, the potential lenders contact one of the credit companies (mentioned above) to evaluate your credit history, as per the Reserve Bank of India guidelines, before approving or rejecting your application. This enquiry made by the lender is what constitutes a “hard enquiry” and it becomes a part of your credit report. In case there have been too many hard enquiries in a very short span of time, it can adversely affect your credit score.As opposed to a hard enquiry, there can be a “soft enquiry” as well, which is also initiated by a bank in order pre pre-approve your credit limit, a credit card, etc. Such enquiries also have no effect on your credit score whatsoever.