Importance of CIBIL Score to Get Approval for Business Loan
Your CIBIL score or credit score is similar to your financial report card. Lenders use it to assess your creditability. If you have a higher score, it shows that you're good at managing your finances. This makes it more likely for your Business Loan to be approved. Your score also influences the interest rate you'll be offered – a higher score often means you get better, more attractive interest rates.
Minimum CIBIL Score Required for a Business Loan
The minimum credit score required for business financing can vary among lenders and types of loans. While some lenders may consider scores as low as 650, others may require a score of 750 and above.
Credit Score Range for Business Loan
Lenders differentiate your score into various categories, usually ranging from 300 to 900. These score ranges determine your eligibility and the interest rates you're likely to be offered. This helps you understand how lenders view your ability to repay the loan.
Factors Affecting Your Score
Your score isn't static; it can change over time. Several factors influence your score, including your payment history, credit utilisation, length of credit history, types of credit accounts, and recent credit inquiries. Understanding these factors is vital for maintaining a healthy credit profile.
Ways to Improve Your Score
If your credit score is low, you need practical advice and techniques to help you raise your score from experts. These steps involve making payments on time, decreasing credit card balances, adding variety to your credit history, and more.
Frequently Asked Questions About CIBIL Score For A Business Loan
A credit score shows your creditworthiness. Having a higher score can help you avail of a loan at favourable terms and interest rates.
You can check your score for free score by following the following steps:
- Step 1: Visit Poonawalla Fincorp’s official website and click on ‘free CIBIL score’.
- Step 2: Enter all the details, such as PAN card, date of birth etc.
- Step 3: Click on the submit button.
Once you have submitted it successfully, your score will be visible on screen and the same will be sent to you on your email ID.
Usually, 750 or higher is good, but it varies by the lender.
You must check your credit score periodically and at least before applying for a loan.
You can improve your score by paying bills on time, avoiding multiple loan applications, and have a mix of credit types.
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