Credit Score

What is a Credit/CIBIL Score?

Basically a Credit score is a three-digit numerical summary of your credit history. This is the value of a credit score is generally between 300 to 900. Your Credit score is prepared on the basis of your entire credit history. This includes all the secured and unsecured debt and any other debt that you have or may have.


You can get your credit report from CIBIL for a nominal fee and you can easily know about your credit score before applying for a loan.

The credit report will include the following information: 

  • The credit history you have received.
  • Pay loan and credit card bills.
  • Late payments and defaults on your previous credits.
  • The loans and credit cards you currently have.
  • Latest information about your loan and credit card applications.

Credit score tells about the borrower's capacity of loan taking amount.

It provides the report to banks that help them to evaluate and approve loan application.

Importance of CIBIL Score

 These are the benefits and Importance of your Credit/CIBIL Score:

  • Your cibil score is based on your payment history, types of credit used, application for new credit and amount you own.
  • For the borrowers of home loan, their required CIBIL score should be at least 650 to avail a home loan.
  • But if you want home loan at the best interest rate from the bank then your minimum required cibil score should be 750.
  • This is considered a good cibil score of any borrower, and if your CIBIL score is between 730 to 900 then it is one of the very best CIBIL score.
  • With the help from your good and maintained cibil you can get the loan on best and lowest interest rates from the bank. 

Whenever you apply for a loan or get a product financed, at that time your CIBIL score can be checked by the financing companies or bank.

A score between 650 and 749 is considered as a  good cibil score, and lenders may offer you a loan after checking your other financial details. However, lenders generally consider 650 as the minimum CIBIL score required for loan. Marks between 550 and 649 are average and need to be worked out.


If your credit score is below than the requirement then your loan application can be rejected by the bank. So, if you know about your cibil then please stop applying again and again into other banks. This will make lower your credit score as various banks making inquiries on an individual's credit rating are viewed negatively.


If your CIBIL score is less than 750 then your chances of getting loan are very less. To get loan at good interest rates you have to work on your cibil score.


For the borrowers, if your cibil is 600 which is such a bad score may be you get loan but in this case the bank and other finance company can take high interest rate on total amount of loan from the loan borrower. There'll be more possibilities to reject your loan application by several banks.

How to get loan with low CIBIL score and no credit history

If your CIBIL score is not good enough then you can apply for loan from smaller  NBFCs( Non Banking Financing Companies) HFCs and MFCs. They can provide you a loan with low CIBIL score, because some of the companies never check CIBIL score but they may charge higher interest rates than the bank. So, you can approach these kind of  companies to get sanction a loan.


If you are facing issues while taking a loan because of your CIBIL score and have no any credit history, you can apply for joint loan with your spouse or other members of your family (blood relationship).

It is useful in getting loan or bigger loan at lowest interest rate.

You can add a guarantor in case of bad CIBIL score or haven't any credit history.


You can apply for loan against security on the basis of your gold, LIC policy or any Fixed deposit.

Interest rates can be little higher than home loan but will be much cheaper than personal loan. If you are taking loan against property then make your all installments on time, it helps to improve your CIBIL score.


You can approach for loan to private lenders. It is popular in semi- urban/ rural areas but they charge too much higher interest rates from their borrowers.

They charge 9%* to 12%* interest annually. It can be helpful but always take this kind of loan in small amount and for short term.

Factors that affect your CIBIL/Credit Score

 

Factors That Impact Your Score Factors That Do Not Impact Your Score
Payment history (includes bankruptcy, foreclosure and collection accounts) Age, race, color, national origin, gender, marital status or religion
Credit utilization Employment information
Length of credit history Income or savings
Credit mix Where you reside
Recent credit applications Alimony or child support payments
How to Improve Credit Score

If you are aware that your Credit score is not healthy for the loan schemes you want to avail, don't worry about it. With a little financial discipline, it is possible to rebuild your credit record and improve your credit score, to eventually become eligible for a loan.

Below are some tips that you can follow to improve your Credit score. There are some tips mention Below that you can follow to improve your Credit score and make it healthy.

Make all of your payments always on time and pay the entire due amount. Partial payments will still be recorded as overdue in your report and late payments will not be accepted by banks. This make you pay the penalty on your repayments
Do not ever try to use your full credit card limit. Always Track utilization of your credit and keep your outstanding balance low to get such a good credit score
Always Keep tracking your credit score and history by accessing your credit information report periodically and correcting errors, if any
Always Monitoring your accounts (both single and joint ) regularly so that no payment will be  missed by you or the joint account holder at the end of the month
Credit Score Roles in Loan Application Process

Your credit score plays a big role in how quickly your loan application is approved. Know how much credit score is required to get a personal loan. There is no fixed CIBIL score that can be said that if you have that score, you will get a loan. However, most banks consider a CIBIL score of 750 and above as good, and one of the first conditions to be eligible for the loan. A score of between 650 and 749 is considered as a  good cibil score, and lenders may offer you a loan after checking your other financial details. However, lenders generally consider 650 as the minimum CIBIL score required for a loan. Marks between 550 and 649 are average and need to be worked out.

A high credit score can also help you get a higher loan amount, that too at better interest rates and with flexible repayment tenure. Credit score helps the bank or loan institution in the following ways:

  • Credit score shows how much risk is there in giving loan to an individual. It Plays a role in deciding the interest rate of the loan. Determines your loan limit (ie. how much you can borrow loan)
  • If your credit score is below than the requirement then your loan application can be rejected by the bank. So, if you know about your cibil then please stop applying again and again into other banks. This will make lower your credit score as various banks making inquiries on an individual's credit rating are viewed negatively.

 

The importance of your CIBIL score to get sanction of any kind of loan: 

- Your cibil score is based on your payment history, types of credit used, application for new credit and amount you own.

- For the borrowers of home loan, their required CIBIL score should be at least 650 to avail a home loan.

- But if you want a loan at the best interest rate from the bank then your minimum required cibil score should be 750.

- This is considered a good cibil score of any borrower, and if your CIBIL score is between 730 to 900 then it is one of the very best CIBIL score.

- With the help from your good and maintained cibil you can get the loan on best and lowest interest rates from the bank.

How to Check Your CIBIL Score

Credit Information Bureau (India) Limited, popularly known as CIBIL, is the premier agency for providing credit reports and scores relating to individuals. CIBIL score plays a big role in deciding whether the bank will sanction your loan or not. It tells about the credit history of the loan borrower. CIBIL collects financial data of individuals such as loan and credit card information from major banks and other financial institutions in India. This data is then presented in the form of a CIBIL credit report, also known as a credit information report (CIR).

The CIBIL score ranges between 300 - 900, with 900 being the highest. Generally, individuals who have a CIBIL score of 750 and above are considered a responsible borrower.

 

There is a free facility to check your credit score on the website of CIBIL. Apart from the website of CIBIL, you can also check the credit score on the other platforms such as OneScore App for free. 

CIBIL credit ratings can be checked online by following a few simple steps, as outlined below:

Step1: Login to CIBIL website- https://www.cibil.com or click here to check your FREE CIBIL SCORE

Step2: Create an Account- Here you have to enter your email ID, name (for this account it will be your username), password, ID proof (like PAN card, voter ID, passport number, Aadhaar), date of birth, pin code and mobile number. After filling these details click on 'Accept and Continue'.

Step3: Verify your identity- The this step you have to verify your identity. You will get an (OTP) on the mobile number you have given. Enter the OTP and click on 'Continue'.

Step4: Go to Dashboard- You will be taken to a new window showing your enrollment confirmation. An e-mail will also be sent to you regarding this. Click on 'Go to Dashboard' to check your credit score.

Step5: View CIBIL Score- You will be taken to myscore.cibil.com. Here you can check your CIBIL Score and CIBIL Report for free.

Related Frequently Asked Questions

Your score falls within the score range of 580 to 669, which is considered fair. A 600 score is a lower than average credit score. Some lenders view consumers as having unfavorable credit within a reasonable range, and may reject their loan applications.

A score between 650 and 749 is considered good, and lenders may offer you a home loan after checking your other financial details. However, lenders generally consider 650 as the minimum CIBIL score required for a home loan. Marks between 550 and 649 are average and need to be worked out.

- Always check your credit report.

- Use your credit card sparingly.

- Clear your all outstanding bills.

- Avoid closing old accounts from reports.

- Always Plan your credit on time.

- Please Avoid multiple loans.

- Pay your card balance through personal loan.

While you may be able to get a personal loan with a credit score between 600 and 700, the lower your score, the lower your approved loan amount. A credit score of less than 600 is considered insufficient for a personal loan in most cases.

A credit score of 640 is the lower end of the spectrum for many mortgage lenders. This should get you approved, but it's usually not enough to get the best deal with interest rates on any type of loan.

Your loan application will not be rejected, if you keep these 4 things in mind:-

  1. Make high down payment.
  2. Try to apply joint loan.
  3. Never ignore to taking your insurance to cover risk linked with a loan.
  4. Review your credit score before applying.

A score between 650 and 749 is considered good, and lenders may offer you a home loan after checking your other financial details. However, lenders generally consider 650 as the minimum CIBIL score required for a loan. Marks between 550 and 649 are average and need to be worked out.

Exceptional: 800 to 850

Very good: 740 to 799

Good: 670 to 739

Fair: 580 to 669

Poor: 300 to 579

Visit the CIBIL website https://www.cibil.com/ and click on "Get Your CIBIL Score" in the top right corner of the page.

To Get your CIBIL score by following these 3 simple steps:-

- Go to the site and enter your personal details make sure that should match your ID proofs.

- Verify your identity by OTP.

- View your cibil score and check the best available offer.

It is absolutely safe to check your credit score online.

Self-checking your credit score, which is a simple credit inquiry or enquiry, does not harm your credit score. But when a creditor or lender runs a credit check, it's often a hard credit check, which can affect your credit score.

If you are already a logged in member to my CIBIL, go to the 'My Account' tab at the top right of the screen and click on the 'Get your free report' link on the page.

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