These days, lenders won't give you a loan without checking your credit score first. A higher score generally improves the chances of a loan being approved because the lender will have more confidence in your ability to repay the loan. So every person should have a roughly idea about his credit score.

It is important to have a good credit score. However, due to lack of knowledge, there are some wrong perception and myths about the score to which CIBIL is prevalent in the market. In this blog, we'd like to discuss some common myths about CIBIL scores.

Poor cibil leads to loan rejection

Sybil assigns a credit score based on that individual's past credit history. A poor CIBIL score will not result in your loan application being rejected in 100% of cases. There are other factors such as the borrower's income, co-applicant's credit score, applicant's reputation, etc. that play a major role in loan decisions.

No loan means a better credit score.

The general public opinion is that if you don't have any credit cards or credit cards, you must have a good credit score. This is not true. People with no credit history have a CIBIL score of -1.

Cibil can edit my information

The partner financial institution submits records of all borrowers to Cibil on a monthly basis. Cibil collects and consolidates all credit information. They do not have permission to modify any details of the borrower. The records are kept by cibil beuro without any modification to the borrower's data.

Become a guarantor/co-borrower with zero impact

Often people sign loan applications as guarantor or borrower without understanding its legal implications. If the primary borrower fails to repay the loan, the guarantor or co-borrower shall repay the loan amount together with interest. In addition, his score will be negatively affected due to the default of the primary borrower.

A good cibil score means lending at a lower interest rate.

Judge borrowers based on their age, income level, banking activity, previous credit history, type of asset collateral, etc., not just a good cibil score. If the lender isn't willing with any of the criteria, they can easily reject the loan application or offer a higher interest rate.

Everyone has the right to inspect my score

Loan borrowers themselves or some registered financial institutions such as banks, NBFCs can create their own cibil scores after being approved by the respective borrowers.

Your savings or investments may inflate your cibil points

Your credit score depends entirely on your previous loan and credit card payments. It has nothing to do with the balances of savings accounts, mutual funds, insurance policies, etc.

Normal deposit of ITR means high cibil score

The income tax return filing status has no effect on the cibil score.

Cibil has a comprehensive list of defaults.

It is a common myth that a cibil contains a list of defaults, which is simply not true.