If you are planning to get a home loan, student loan, etc. then it is wise to do a CIBIL score check. This is because if your score is poor then you can cause even more damage to it by sending loan applications that will be rejected eventually. By deciding to improve CIBIL score first, you can increase your chances of loan approval, and thus minimize CIBIL score loss.
There are a number of websites available on the Internet that claim to offer a free CIBIL score for every credit user. The majority of these are free to use, but some may charge a small fee for the service. However, the question is- how authentic are the scores provided by such websites? Also, does free CIBIL score really exist? The answer is- no. The actual, genuine CIBIL score that every credit using individual has is never available for free. Only CIBIL has the authority to release a report for every individual, and the report is the only document that carries the original score.
Most of the websites that offer a free CIBIL score merely provide an estimate. You typically have to provide information on your credit history, existing debts, your salary, etc. for the website's algorithm to calculate a rough score.
How Good is a Free CIBIL score?
Ideally, you should never rely on a free CIBIL score. Although, in most cases your free score should be comparable to the actual score, the results offered by third-party websites can be quite unpredictable. The chances for error are also high, which is why it is only safe to rely on CIBIL for your score. This alone should be always referred to when you have to make important financial decisions. If you are planning to improve credit score then you should monitor your actual CIBIL report that can be easily obtained from CIBIL's official website.
Here are some of the reasons why you should always obtain the original CIBIL score-
1) Accuracy- Only original CIBIL report can tell you your original score, which is 100% accurate. Free CIBIL score is just an approximate value, and almost never accurate.
2) Additional Info- While a free score can give you a rough idea of where you stand financially, you can't know exactly what you need to work on for a higher score unless you get a CIBIL report. This is because a CIBIL report can give you a detailed information on your credit standing. For instance, if you find any mistakes or errors in your report, you can have them rectified and improve score instantly. You can also look for negative remarks that your lenders may have left in the report, and by requesting them to have them removed you can create a better report for the future lenders.
3) Money Management- In the fast paced world that we live in today, we seldom get time to pay attention to our expenses. A credit report can help you get a better control on your credit utilization. It contains the details of all your loans and credit cards, and by monitoring your payments you can manage your expenses better. You can even prevent yourself from defaulting on a loan with it.
4) Security- Although there are many authentic websites that offer an estimated CIBIL score, some may have ulterior motives. You never know what a website like such could do with the information provided by you. With identity thefts being so common it can be risky to trust any website other than the CIBIL's. For a modest advantage of free CIBIL score you may end up becoming a victim of a fraud.
On the final note, yes, a free CIBIL score does exist, but it depends how do you define a free CIBIL score. If you want the actual score then you have to pay a nominal fee (of a few hundred rupees) and get it from CIBIL's official website. However, if a rough estimate will be alright for you, then yes, you can get it for free. Still, if you can you should always refer to CIBIL's official score, for the banks will also take only this score into account when mulling over your loan or credit card applications.