The first credit bureau in India is Credit Information Bureau (India) Limited or CIBIL. It tracks all your credit-related activities as an individual or entity. All loan and credit card transactions are evaluated to determine your CIBIL score. Along with CIBIL, there are three other credit bureaus in India: Equifax, Experian, and CRIF High Mark. However, most lenders prioritize the CIBIL score. This blog will help you understand the importance of CIBIL score in India.
What is a CIBIL Score?
CIBIL score is a three-digit number ranging between 300 and 900. It is largely based on your loan or credit card repayment history. It provides lenders with a quick idea of your creditworthiness and ability to make timely repayments. Your credit report also contains a comprehensive record of your past and current credit activities.
Why is CIBIL Score Important?
A better credit history means a higher credit score. This allows a lender to determine your creditworthiness. Thus, it is vital to understand the importance of CIBIL score:
- With a higher CIBIL score, you get favorable loan terms such as your desired loan amount and interest rate.
- With a lower CIBIL score, you might often face loan application rejection by lending institutions.
- You might end up paying higher interest rates or get unfavorable terms associated with the loan.
- Having a strong CIBIL score significantly increases your chances of getting your loan request approved.
You can check CIBIL score at Poonawalla Fincorp for free by clicking on the ‘Free CIBIL Score’ button.
How is the CIBIL Score Checked?
You can check your CIBIL score for free with Poonawalla Fincorp. The steps are as follows:
- Step 1: Click on the ‘Free CIBIL Score’ button.
- Step 2: Enter your personal and contact details accurately.
- Step 3: Input the OTP received on your registered mobile number.
- Step 4: Click on the ‘Submit’ button.
Factors that Affect CIBIL Score
There are some key elements that affect the calculation of your CIBIL score. So, it is essential to know these factors as it includes:
- Repayment History: Your score goes down in case there is a history of late repayments or defaults.
- Credit Mix: A balanced ratio between secured and unsecured loans is advantageous.
- Multiple Loan Applications: Making a lot of loan inquiries hurt your credit score. It represents that your debt burden can potentially increase in the future.
- High Credit Utilization: High credit utilization can massively hurt your credit score. Thus, it is suggested to use 30% of the credit limit.
ALSO READ :- How Can I Get a 900 CIBIL Score?
How to Get a Personal Loan without CIBIL Score?
You may not have a credit history before taking your first Personal Loan. However, you can still get a Personal Loan without a CIBIL score in the following ways:
- Showing your income proof can help you get your loan request approved.
- For loan applicants with no CIBIL Score, lenders have some specific eligibility criteria like steady income, working for a company over a certain period, etc.
- You can even apply for a joint loan or make someone your loan guarantor who has a better CIBIL score.
- Lastly, you can even apply for a lower Personal Loan so you get instant approval for your credit.
How to Apply for a Personal Loan Online?
Getting a Personal Loan with favourable terms can help you tackle different financial crunch situations. Follow the below steps to get a Personal Loan with suitable terms:
- Step 1: Click on ‘Apply Now’ button.
- Step 2: Fill in your name, gender, date of birth, PAN Card details, net monthly income, number, and other personal information.
- Step 3: Upload the required documents like salary slips, bank statements, etc. needed for verification and submit your application.
To Conclude
Your CIBIL score is determined by using a comprehensive evaluation of your credit history. A lender’s decision on your loan request relies massively on your CIBIL score, as it provides an accurate picture of your creditworthiness. Thus, you need to understand the importance of CIBIL score and constantly work on maintaining a good score.
Frequently Asked Questions About CIBIL Score
1. What is a good CIBIL score?
Anything above 700 is considered a good
CIBIL score. Lenders generally reject loan applications or do
not offer favourable terms to loan applicants with scores lower than 700.
2. How do you maintain a good CIBIL score?
You must make loan repayments on time, utilise below 30% of your
credit limit and avoid applying for multiple loans at a time.
3. How much should be my monthly salary to be
eligible for a Personal Loan?
You must have a
minimum net salary of ?30,000 per month to stand eligible for a
Personal Loan.