For new borrowers, building a healthy credit score and maintaining the same might come across as a daunting task. However, every task becomes easy when it is started on the correct note. For new borrowers, more commonly known as new-to-credit (NTC) consumers, it’s essential to understand the importance of having a healthy CIBIL Score and Report, as it can impact your ability to get loans and credit cards at lower interest rates.
To better understand it, the term new-to-credit borrowers refers to those individuals who have had no prior credit history and have just availed their first-ever traditional credit product such as a consumer durable loan, personal loan, agricultural loan, two-wheeler loan, gold loan, home loan, or other credit product. A recent global study by TransUnion also highlights that new-to-credit consumers are key contributors to sustainable financial inclusion and economic growth in India.
In this article, we will discuss the importance of having a healthy credit profile, and how NTC consumers can maintain a healthy CIBIL Score.
Understanding Your CIBIL Score and Report
The first step in the journey of building your credit profile is understanding your CIBIL Score and Report. The CIBIL score is a three-digit number ranging from 300 to 900, while a CIBIL Report is a detailed summary of a person's credit history. The CIBIL score is a numeric representation of a person's creditworthiness. Both the Score and the Report are calculated based on your credit history, which includes information such as your credit accounts, payment history, credit utilization, and length of credit history. The Report goes one step further and also includes information about your credit accounts, payment history, and credit inquiries.
The lenders will use your CIBIL Score to evaluate your likelihood of repaying your debts on time, and the Report will give the lender a sense of your creditworthiness and help making lending decisions.
Regularly monitoring your credit report is crucial to avoid negative impacts on your financial health caused by errors or fraud. By identifying inaccuracies or fraudulent activity, you can take action to protect yourself, improve your credit score, and prevent difficulties in obtaining credit or loans. New borrowers can access their Free Annual Credit Report by visiting the TransUnion CIBIL website.
Starting right – Building healthy habits for good credit health
Keeping it up – Maintaining a good credit profile
By starting small, understanding how credit scores and reports work, being a responsible borrower, and taking steps to improve your credit score, you can set yourself up for financial success in the future.
Stay credit-ready by monitoring your CIBIL Score & Report.
Disclaimer: The information posted on this blog (Information) is prepared by TransUnion CIBIL Limited (TU CIBIL). This Information is for generic informational purposes only and is meant for consumer education and awareness about credit scores, credit history and credit reporting. The Information posted on the blog does not constitute credit advice and the user will need to consider the same and take independent informed decisions . No part of this Information may be quoted out of context, distorted ,distributed, published and/ or reproduced in any form and manner whatsoever. Consumers are advised that the Credit Information Reports (CIRs) prepared by TU CIBIL are based on collation of information, substantially, provided by credit institutions who are members with TU CIBIL. TU CIBIL is not responsible and /or liable for errors and/or omissions caused by inaccurate or inadequate information submitted to it by credit institutions. TU CIBIL does not guarantee the adequacy or completeness of the Information and/or its suitability for any specific purpose nor is TU CIBIL responsible for any access or reliance on the Information. TU CIBIL expressly disclaims all such liability. Further, this Information is based on the data available with TU CIBIL at the time of publication and therefore may not be up-to-date.