1. CIBIL Score: Your Credit Snapshot
The CIBIL Score is a three-digit number (300 to 900) that reflects your creditworthiness, calculated based on factors like repayment history, credit utilization, length of credit usage, and the mix of credit types.
Why it matters: A score above 750 boosts your chances of loan approvals and favorable interest rates.
How to improve it: Pay EMIs on time, maintain low credit utilization, and avoid frequent loan applications.
2. Credit History: Your Financial Track Record
Credit History captures your borrowing behavior, including account details, repayment trends, defaults, and overall credit patterns.
Why it matters: Lenders rely on this history to gauge your reliability as a borrower.
How to maintain it: Ensure timely payments, avoid defaults, and regularly review your credit report for accuracy.
3. Debt-to-Income (DTI) Ratio: Gauging Your Debt Load
The DTI Ratio compares your total monthly debt payments to your gross monthly income, expressed as a percentage.
Why it matters: A DTI below 30% signals financial stability and enhances your borrowing capacity.
How to improve it: Increase income, minimize unnecessary debt, and limit additional loans.
Key Takeaways
Monitor your CIBIL Score and Credit History regularly.
Keep your DTI Ratio within manageable limits.
Borrow wisely and always have a repayment strategy in place.
By mastering these financial metrics, you can strengthen your credit health and open doors to better financial opportunities. Stay informed and take control of your financial future!