Personal loans are a common way for people to get the money they need these days. Your CIBIL score is a major factor in determining whether or not you are approved for a personal loan. An excellent CIBIL score will improve your loan approval chance. With a high CIBIL score, you can qualify for low-interest loans.
CIBIL score of 750 or more is good
The CIBIL score ranges from 300 to 900 marks. If the score is 750 marks or more then it is easy to get the loan. The better the CIBIL score is, the easier one gets the loan. The CIBIL score is based on the credit history of 24 months. Credit Information Bureau (India) Limited is the only agency in India to provide CIBIL score.
How to know your CIBIL?
Step 1: Visit the CIBIL website www.cibil.com.
Step 2: On the home page, click on Get Your Free CIBIL Score.
Step 3: Enter your name, email ID and create a password. After this choose any of your ID proof (Passport Number, PAN Card Number, Aadhar Card or Voter ID Number). Then enter your pin code, date of birth and phone number.
Step 4: After entering all the details, click on Accept and Continue.
Step 5: Enter the One Time Password (OTP) received on your phone and click on Continue.
Step 6: You will receive the message ‘Your enrollment is successful’. Then go to the dashboard of the website.
Step 7: Your CIBIL score is in front of you.
Do not click on pop-ups that appear on the website.
What does CIBIL score depend on?
30% CIBIL score depends on whether you are repaying the loan on time or not. 25% on secured or unsecured loans, 25% on credit exposure and 20% on loan utilization.
Does checking the CIBIL report frequently affect the score?
When you check your CIBIL score, it is considered a “soft inquiry” and does not have any negative impact on your credit score. However, if the lender or credit card issuer requests CIBIL to check your credit report (usually when they seek information for a loan or credit card), it counts as a “hard inquiry”, Hard inquiries are recorded in the Inquiry section of your credit report.
A credit score can be affected if you make more than one hard inquiry in a short period of time. This is known as “Credit Hungry Behavior.” Still, soft inquiries are sometimes considered important financial transactions.
Why do lenders check your CIBIL score before approving your loan?
As you know, your CIBIL score measures your credit worthiness. Your lender checks your score for several reasons:
- Investigating one’s past and present credit records.
- Calculating Your Loan Repayment Ability.
- Examine your credit report to evaluate your personal risk.
- Determine if you are qualified for a loan by reviewing the lender’s requirements.
- Figure out the best loan amount and interest rate for your situation.
Hence, your CIBIL score is an important tool to help you manage your financial health.
CIBIL score gets worse due to these reasons
- If you have taken a loan from the bank and do not pay it on time, then your credit score will get worse or lower.
- If you have a credit card and you do not pay the bill on time, it will adversely affect your credit score.
- Your credit score suffers even if you do not maintain minimum balance in your bank account or have a minus balance in it.
Top Credit Bureaus of India: TransUnion CIBIL, Experian, CRIF Highmark, Equifax