The credit score is a three-digit number which grades the financial behaviour of an individual. It is used by financial organisations to calculate the risk factor involved in offering the individual with credit-based financial products such as loans and credit cards. Generally, a credit score of 750 or above is considered a par score. An individual with such a score can enjoy the most beneficial terms and features on financial products.
RBL credit card payment along with loan repayments and even rents affect CIBIL score. It is crucial one understands CIBIL score itself along with the functioning of credit cards so as to best manage their finances. CIBIL score is not the only determinant required for approval with KYC documents forming a major chunk of the ancillary requirements along with payslips and account transaction details.
Understanding credit or CIBIL score
The credit score is assigned to individuals by Credit Information Companies (CIC). CIBIL (Credit Information Bureau India Limited) and CIBIL score are considered as one of the highest CIC authorities. The fundamental basis of this assignment is that of existing credits and loans, and especially their repayment; including past as well as present transactions by an individual.
Evidently, from loan repayment to the usual or an RBL credit card payment, every aspect related to finances and credits come under scrutiny when this number is assigned.
Credit score determinants
Of the many factors that decide the credit score of an individual, the most crucial pointers are as follows –
- Payment history: This comprises around 35% of the credit score. Depending on the fulfilment of KYC and other required documents, customers are eligible for several financial products like credit cards and loans. The repayment of these products on a timely basis is of vital importance. While brisk borrowings do not pull down the credit score, missing on payment schedules immensely affect it.
- Credit utilisation: Credit cards are among the most popularly used credit-based tools in the financial market. Percentage of available credit amount is another factor crucial in determining the CIBIL score. It alone contributes to around 30% of the determination of this score. This is one method where one can use credit card to increase their CIBIL score. According to FICO, individuals maintaining less than or around 60% credit utilisation ratios are most stable financially. Therefore, having multiple cards but maintaining the ratio helps.
- Length of credit history: Around 15% of the score depends on the duration for which an account has been open along with the time elapsed since the last transaction. Longer credit history provides better scope for lenders as well as FICO to understand an individual’s financial habits.
Lenders like Bajaj Finserv, despite taking a detailed note of a borrower’s financial history, also ensure easy methods of loan disbursal. They bring you pre-approved offers that make availing loans quick and easy. Pre-approved offers are available on numerous financial products like credit cards, home loans, business loans and personal loans, etc. You can check out your pre-approved offer by providing your name and phone number.
- New credits: Constituting around 10% of the score, new accounts should be opened as and when required. While one might think opening multiple accounts at a go might help in credit utilisation ratio, this also suggests financial trouble.
- Credit mix: A very vague idea in itself; this comprises around 10% of the score. According to experts, repaying and clearing multiple debts suggests an individual to be a secure investment. This, In turn, betters the credit score.
Why RBL SuperCard?
As discussed above, RBL Credit Card payment aids in improving the credit score of an individual. Timely repayment helps not only in improving the CIBIL score but also makes the financial history of the individual strong enough for credit card or loan approvals. In the same regard, one should be cautious as to choose the right credit card for themselves.
There are numerous NBFCs, that provide credit cards of different sorts. Amongst these, only few credit cards such as the Bajaj Finserv RBL Bank SuperCard can be used for additional purposes such as ATM withdrawals and personal loans against the unutilised amount. Note that both these facilities come with their respective interest-free repayment periods of 50 and 90 days respectively. Maintaining timely repayment of large transactions converted into EMIs also influence the credit score.
Another convenient feature of this card is its easy availability and approval. While repayment on any credit card is a must, the RBL SuperCard requires special mention not just because of easy repayment, but especially owing to its several discounts. These discounts make the repayment easier along with a rebate, thereby making it convenient and attractive to first-time as well as seasoned borrowers.
Applicants looking forward to increasing their CIBIL score should definitely look into the option of a SuperCard, owing to its added features which make improving the score easier.