How is CIBIL score calculated?

If you ever go to take a loan, then first of all your CIBIL score is checked there. Credit score is like your report card, which tells how your repayment history has been in the previous loan. Although this score ranges from 300 to 900, but a CIBIL score of 750 or above is considered good. You can improve it by doing transactions in a better way, but for this you should first know how the CIBIL score is calculated. Let’s know.

Payment History

Whether you have paid your old loan on time or not, this plays the biggest role in the calculation of your credit score. It sees how many payments you made on time, if late then how many times you were late and also sees how many times you have missed payment or EMI. Its share in the calculation of CIBIL score is about 35 percent. 
Recently Reserve Bank has made a new rule regarding CIBIL, you must know about that too.

Credit Exposure

Apart from this, it is also seen how much credit i.e. loan is available in your name and how much of it you have used. Its share in the calculation of CIBIL score is about 30 percent. So next time when you use your credit card, keep in mind that you do not use its full limit, but use only up to 30-40 percent.

Credit History

This is also a big parameter in the calculation of CIBIL score, which accounts for about 15 percent of the calculation. Credit history means that the longer your loan is, the higher your CIBIL score will be. However, keep in mind that this loan should not be very big. Also, keep in mind that you pay all your EMIs on time. 
RBI has already made 5 rules regarding CIBIL, which you must know about.

Credit Type

While calculating the CIBIL score, it is also seen how many loans you have and what type they are. It is checked how many loans are unsecured and how many are secured. The more secured loans you have, the better your CIBIL score will be. Its share in the calculation is about 10 percent.

Loan related activities

The remaining 10% in this calculation checks all your loan related activities. It is seen whether you have taken too many loans recently, because it means that the loan burden on you will increase. At the same time, it is also checked how many times you have inquired for a loan, because it is believed that you can take many loans in the future, which will increase your liability significantly.