What is a CIBIL score?
A credit score or CIBIL score is actually a numerical representation of your creditworthiness. CIBIL score consists of a three-digit numeric value ranging between 300 and 900. CIBIL is an abbreviation and the full form of CIBIL is Credit Information Bureau (India) Limited. It is now known as TransUnion CIBIL is one of the regulated agencies which is authorized to give a credit score. The other three credit bureaus in India are CRIF High Mark, Experian and Equifax. A credit score check or CIBIL score check is recommended before you apply for any loan. We offer a free CIBIL score check so that you can understand the range of your score. All you need to do is simply download the CIBIL report and analyze it to plan your loan application.
The four major factors that influence credit score are - credit mix, repayment history, new debt, and credit utilization ratio.
When applying for a loan with Poonawalla Fincorp, your credit score or CIBIL score will help you get the desired loan amount. Your credit score directly impacts other factors like the rate of interest, loan tenure, and loan amount. You should maintain a healthy credit score or CIBIL score to increase your chances of loan approval. Generally, a score above 750 is considered an excellent credit score and can help you get extremely attractive interest rates from Poonawalla Fincorp. Also, with our quick process, right from application to disbursal, you will be assured of a hassle-free process all along.
How does CIBIL score work?
In India, credit score ranges from 300-900. It is further divided into several categories, such as bad CIBIL score (550 and below), poor CIBIL score (between 550 and 649), average CIBIL score (650 and 699), good CIBIL score (between 700 and 749), and excellent CIBIL score (between 750 and 900). Please note that these bifurcations are only indicative and may vary.
|550 and below
|550 - 649
|650 - 699
|700 - 749
|750 - 900
- Bad CIBIL score (550 and below)
A bad CIBIL score or credit score is considered unhealthy for an individual who is looking for a loan. With a bad credit score, your chances of getting a loan are considerably low especially if you require a high amount of loan. In such cases, you need to adopt extremely disciplined financial habits, before getting back to us for a loan. Once your credit score sees an improvement, you need to simply visit our website and select the required loan from the available suite of products.
- Poor CIBIL score (between 550 and 649)
A poor CIBIL score indicates that an individual delayed the loan repayment. It is highly risky as it also reflects the inability to repay a loan on time or a chance of delay in loan repayment. To improve your credit score, it is advised that you first repay the previous loan amount before applying for a new loan.
- Average CIBIL score (650 and 699)
An average CIBIL score is neither considered good nor bad. It is advised that an individual must improve their credit history by making payments on time. This helps build trust in your creditworthiness. With an average CIBIL score, you may get a loan approval but with a slightly high-interest rate and with lesser additional benefits. To prevent your CIBIL score from reducing further, you need to pay all the loans on time.
- Good CIBIL score (between 700 and 749)
A good credit score is better than an average credit score but provides a lower comfort level compared to an excellent CIBIL score. With a good CIBIL score your chances of loan approval improve multifold. Improving your credit score further may allow you to get a loan at a very attractive interest rate from us and ensure hassle-free approval.
- Excellent CIBIL score (between 750 and 900)
We always advise you to keep your CIBIL score between 750 and 900 as it indicates that you have made all the repayments on time. Borrowers with excellent CIBIL scores are considered low-risk borrowers - who pay all their credit card bills and loan EMIs promptly. Furthermore, they are also eligible for the best interest rates on the approved loan amount. Generally, an individual with an excellent CIBIL score can avail of a high amount loan with us at an extremely attractive interest rate and other benefits like minimal paperwork, flexible loan tenure, etc.
How is your CIBIL score calculated?
CIBIL is one of the prominent credit bureau which is authorised to publish the credit score of borrowers. It is directly regulated by the RBI’s (Reserve Bank of India) Department of Banking Operations and Development. CIBIL score is influenced by several factors which determine the category or level of your credit score.
Factors that impact your CIBIL score:
Credit or repayment history
Credit mix and repayment duration
- Credit or repayment history
When you apply for a loan or credit card, you must have a good credit or repayment history. This establishes your creditworthiness and allows us to provide you with a lower interest rate and other benefits. Repaying the loans on time will help you increase your credit score and any default in payment or late payments will reduce your credit score.
- Credit Utilization
Credit utilization is majorly influenced by how much percentage of credit card limit is utilized monthly. Overspending or overutilization of credit limits will hurt the credit score.
- Credit mix and repayment duration
Credit type is what kind of loan you have applied or availed, depending upon your requirements. Availing for a mix of secured and unsecured credit products including credit card will help you in maintaining a healthy credit score. A longer tenure of servicing a credit product positively impacts your credit score.
- Credit Inquiries
Credit inquiries are conducted to check your credit history. If you have applied for multiple loans in a short period, it will hurt your credit score. Also, each time you apply for a loan, it will reflect on the credit report. This will reflect credit-hungry behaviour, which is looked at negatively by lenders.
What is the Importance of a CIBIL Score?
Considering the uncertainties of life, you might require a loan or credit at some point in time. When applying for a loan, a borrower with a high CIBIL score is likely to get quick loan approval compared to one with a low CIBIL score. This is one of the major reasons why the CIBIL score is important. A high CIBIL score will help build trust when it comes to loan repayment. This ensures that you receive attractive interest rates and other benefits.
CIBIL Score – Importance and Significance
Loan or Credit Approval
Attractive Interest Rate
Let’s check out the top factors that highlight why CIBIL score is important. These will help you understand the role and importance of CIBIL so you can manage your finances accordingly:
A major factor that stresses the importance of a CIBIL score is your creditworthiness. A good credit or CIBIL score establishes you as a creditworthy borrower. A high credit score indicates that you have been very timely and disciplined in your credit behaviour in the past. Therefore, chances are that this credit behaviour will continue going ahead, creating a good impression on lenders.
- Loan or Credit Approval:
The importance of CIBIL score increases even more at the time of loan or credit approval as it determines the eligibility of the borrower. The final call on the loan amount is made using the CIBIL or credit score as a major guiding factor. A good CIBIL score ensures the approval of the desired loan at a favourable interest rate.
- Attractive Interest Rate:
CIBIL score directly influences the rate of interest. An individual with a good credit score is eligible for the best interest rates available. On the other hand, someone with a poor credit score may get a loan at a high interest rate, which can impact repayment and finances. Therefore, maintaining a good CIBIL score is essential to get loans at attractive interest rates.
Is checking credit scores on third-party websites safe?
Yes, checking your credit score on third-party websites is entirely safe. Various lenders, such as Poonawalla Fincorp, allow you to check your credit score completely for free and keep your information safe. Moreover, if you are skeptical about the safety of your information, you can always check your credit score on the official CIBIL website. When an individual checks their credit score, it is considered a soft inquiry. You can check your CIBIL score multiple times for free. Credit Bureaus provide CIBIL scores for free only once a year.
Checking your CIBIL score does not impact your CIBIL score, whereas when a lender pulls your report, it impacts your CIBIL score—this is considered as a hard inquiry. Checking on official websites is easier as it involves minimal steps and processes. While checking a credit score, you provide personal information such as your PAN card number, Date of birth, personal phone number, etc. A credit score indicates your creditworthiness; a high credit score signifies you will repay your loan on time, whereas a lower credit score indicates your inability to pay your loan on time. Checking your CIBIL score at regular intervals of time will help you maintain your CIBIL score.
How can you improve your CIBIL score?
A good credit score indicates the creditworthiness of a borrower. Hence, it would help if you made every effort to improve your credit score. A better CIBIL score will help avail loan faster as compared to a poor CIBIL score. As an individual, you can check your CIBIL score on the official website of the CIBIL or trusted websites such as Poonawalla Fincorp. Along with a better CIBIL score, you must keep a check on your income, employment history, and other financial obligations. Below are a few of the ways to improve your CIBIL score.
Avoid making multiple loan applications
Maintain your Debt-to-income ratio
Choose your loan tenure
Make your repayments on time
Choose your Loan amount
- Avoid making multiple loan applications:
To improve your CIBIL score, you should avoid making multiple loan applications, as multiple loan application rejections can negatively impact your credit score. You should make one application at a time to avoid such circumstances and wait for approval.
- Maintain your Debt-to-income ratio:
A debt-to-income ratio indicates that a borrower has enough money to repay a loan on time. A high debt-to-income ratio will negatively impact your CIBIL score. Hence, you should maintain your CIBIL score to improve your chances of availing loan faster.
- Choose your loan tenure:
Tenure is a predetermined timeline between a borrower and a lender. While choosing a tenure, you must consider all the factors, as a shorter tenure will put a lot of pressure on the borrower. On the other hand, if you have a higher loan amount, you should opt for a longer loan tenure.
- Make your repayments on time:
Using the EMI calculator to plan your repayments in advance is advisable. Using an EMI calculator will help you plan your EMI and avoid delay or default in your EMIs. Paying your repayments on time will help you improve your CIBIL score.
- Choose your Loan amount:
You should choose your loan amount while considering all the factors. The outstanding loan amount and total loan amount directly impact your CIBIL score. A high outstanding balance can affect your CIBIL score.
How to Check Free CIBIL Score Online Within 4 Easy Steps?
Click on ‘Get Your CIBIL’ and select employment type & gender within the CIBIL Check form.
Provide your name, contact details, PAN card, and address proof.
Terms and Condition
Read the terms & conditions carefully, select ‘Agree’, and click on the submit button.
You will get your CIBIL score value within a short time & be able to download the CIBIL report.
Benefits of Having a Good CIBIL Score
There are various benefits of a good CIBIL score (700 and above) that can prove to be extremely advantageous for you in the long run. It allows you to get better loan terms and favourable interest rates, helping you repay your debts easily without any stress. Here are some of the top benefits of CIBIL score:
Easy Loan Approval
Higher Credit Limit
Better Interest Rates
Improved Negotiation Power
Improved Financial Health
- Easy Loan Approval:
One of the major benefits of CIBIL score is easy loan approval. It helps you get quick and easy loan approvals from financial institutions. This means you can easily get the financing you need to fulfil your dreams.
- Better Interest Rates:
A high CIBIL score benefits you when you apply for loans. With a good CIBIL score, you can negotiate better interest rates on your loans and credit cards. This means you can save lots of money in the long run by paying lower interest rates.
- Higher Credit Limit:
A good CIBIL score can also help you get a higher credit limit on your credit cards, which can prove to be helpful during financial emergencies. You can also make bigger purchases and enjoy better rewards and benefits.
- Improved Negotiation Power:
Another benefit of a good CIBIL score is that you can negotiate with lenders and financial institutions for better terms of debt. You can ask for flexible loan terms and lower interest rates, saving you money in the long run.
- Improved Financial Health:
A good CIBIL score is an indication of your responsible credit behaviour and financial health. It helps you build a positive credit history, which can open up more financial opportunities for you in the future.
In conclusion, maintaining a good CIBIL score benefits you and is crucial for your financial well-being. It not only helps you get easy loan approvals and better interest rates but also improves your negotiation power and a higher credit limit. By building a positive credit history, you can enjoy a healthy financial life and take advantage of more financial opportunities in the future. Therefore, it is essential to keep a check on your credit score and take the necessary steps to maintain it for a better financial future.
CIBIL Score related frequently asked questions
In India, four major bureaus are responsible for calculating credit scores - TransUnion CIBIL, Experian, CRIF High Mark, and Equifax. Each bureau has its respective methods and algorithms used for calculating the credit score. As a borrower, it is advised to keep your credit score as high as possible to increase your chances of loan approval.
A good CIBIL score will always help you in numerous ways. Here are a few of the benefits that you will have with a good CIBIL score:
- Higher chances of loan approval
- Comparatively low-interest rates
- Attractive pre-approved loans
- Premium credit cards
- Higher loan amount/Credit card limit
- Long-tenure loans
It takes some effort and discipline to maintain a good CIBIL score in the long term. The initial days of credit or loan application are vital as you develop several good credit habits. Timely repayment of loans or credit, not applying for multiple loans at the same time, and intelligent utilization of credit help improve and maintain a good credit or CIBIL score. You should constantly keep an eye on the score to ensure you stay on the right track.
If your CIBIL score is less than 750, you need to focus on improving the same. Here are a few things you must do to improve your CIBIL score:
- Regularly monitor your credit score
- Repay your loans and other credit on time
- Avoid applying for multiple loans at one time
Poonawalla Fincorp's website offers a free feature for checking your credit score, which fetches your score from the CIBIL website and displays it to you. The advantage of fetching your CIBIL score from Poonawalla Fincorp is that you get instant access to a bouquet of loans from us as soon as you get your CIBIL score. These loans have the “PFL advantage” of attractive interest rates, best-in-class customer service, a digital-first platform, complete transparency and a smooth, hassle-free process.
Here is the list of the information that is required to check your CIBIL score:
- Personal Email ID
- Residential Address
- PAN Card Number
- PIN Code
- Date of Birth
- Personal Phone Number
No, there are four credit bureau agencies in India. These are TransUnion CIBIL, CRIF Highmark, Experian, and Equifax.
Here are four steps you need to follow to correct errors in your CIBIL credit report:
Step 1: Download your latest CIBIL report.
Step 2: Check the problems and errors in the CIBIL credit report.
Step 3: Report the problems and errors in the CIBIL report as per the instructions provided.
Step 4: After verifying the errors and problems, CIBIL will respond to you within 30 days. Once verified, you will have the rectified report.
Yes, a single delay in payment can impact your overall credit score. Any further payment delays reduce the credit score further. This will impact other factors such as the rate of interest, loan tenure, and other credit offers.
Firstly, you should always double-check before providing any details. In case you have filled in any wrong details, you can report it on the official website of CIBIL. Once the mistake is rectified, you can download the latest report and use it for your loan decision. It is advised that your CIBIL report and score are devoid of any errors or mistakes.
Yes, you can check your CIBIL score on a third-party website in a safe manner, provided the website belongs to a reputed company such as Poonawalla Fincorp. However, all these third-party websites might not be trustworthy. Hence, you can use the feature on Poonawalla Fincorp’s website to check your CIBIL score for free, for a limited period or for a few times every year. You don’t need too many documents at your disposal, and you can simply check CIBIL score by PAN Card.
It is recommended to monitor your CIBIL score as it will help you keep track of financial debts and credit availed. This will further help you plan your future. Once you are aware of your CIBIL score, you can act accordingly to improve your CIBIL score even further. You can check your credit score for free from trustworthy sources, such as Poonawalla Fincorp’s website. The free credit report can be easily downloaded and studied for planning your loan application.
It is a good habit to check your CIBIL score frequently as it will give a brief idea about your financial health and habits. If you are checking the score by yourself, it is considered a soft inquiry, and it doesn’t adversely affect your CIBIL score. Hence, you should make full use of the “CIBIL score for free” feature on our website. Once you check your credit score for free in this manner, you will get a fair idea regarding your loan approval prospects.
You can check your CIBIL score on our website. Simply fill in the required details and check your credit score for free. This credit score check is highly recommended before you apply for a loan. Once you know your CIBIL score, you can plan your loan application accordingly. If the score is too low, you might want to improve it before you apply for a loan.
A CIBIL score of 750 and more is considered an ideal CIBIL Score range. In this case, you are more likely to get the desired loan amount with a low rate of interest. By regularly repaying your debt you can keep your credit score in the ideal range. If the score is out of range, regular repayment will get a CIBIL score in the ideal range.
CIBIL report represents your credit history which helps you to acquire loan approval. The CIBIL report can be accessed by your current lenders, potential lenders, employers, and insurance companies. They want to know your CIBIL score to check your overall financial habits and discipline in terms of timely repayment. The credit report check gives them an idea if the person they are dealing with has been financially responsible in the past.