Why CIBIL Score is Important? | Check Credit Score | Improve | 2022

CIBIL Score Meaning

Have you ever considered taking a borrow to buy a new house, or to purchase that dream car of yours? or for the business?
If you’re not sure what to do, we have all the answers covered.
If you want to loan from a bank or a financial organization, make sure you have a good CIBIL score.

Credit Information Bureau (India) Limited, commonly known as CIBIL,
is India’s first Credit Information Company to maintain one of the largest collections of customer credit information globally.

They have over 5,000+ members–including all leading banks,
financial institutions, non-banking financial companies and maintain credit records of over 1000M+ customers and businesses.

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Why CIBIL Score is Important?

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A CIBIL Score is a customer’s Credit score. CIBIL Score meaning is a three-digit numeric summary of a customer’s credit history and a reflection of the person’s credit profile.

This is based on past credit behavior, such as borrowing and repayment habits as shared by banks and lenders with CIBIL on a regular basis.
The score usually ranges between 300 and 900.
A score below 300 is poor, whereas the score of 900 is ideally the best.

A credit check is performed online.  We shall look at the step-by-step guide of how to check credit scores a little later.

If the customer has a very good score,
the institution grants him/her a loan at a lower rate of interest and with minimum documents.

If the score of the individual is low,
banks either do not accept his/her loan application or grant him a loan at a higher rate of interest.

Although, the only CIBIL score is not the only criterion that decides whether banks or financial institutions would grant the loan to the applicant or not.
There are various other key factors that help these organizations to decide the approval of the loan application of the applicant.
However, this score of the applicant plays a key role when banks or financial institutions offer the interest rate.

An applicant having a higher score gets a loan at a lower rate of interest, whereas the applicant having a lower score gets loans at a higher rate of interest.

Now, let’s get to the main aspect – CIBIL score for loan & Cards.  Surely, by now you have understood what a credit score is and what CIBIL is.

Read SBI Loan Against FD : Interest Rate | Features | Benefits | Online | Repayment

Best Site to Check Credit Score for Free

Here is how to get a free CIBIL report once a year.

  • Go to the CIBIL website.
  • Fill out the  provided customer’s form that requires your mandatory details such as full name, mobile number, email address etc.
  • On next tab, Fill out the additional information about you including your PAN card number.
  • You will answer all the queries correctly about your loans and credit cards, based on which your credit score will be calculated.
  • If you require only a one-time, free credit score and report in a year, then proceed to select “No Thanks” at the bottom of the page.
  • Using your credential that was created in Step 2, you can log in to your account.
  • Once you log in, all your personal information will be auto-populated by default. Kindly enter your mobile number and click submit.
  • Once you submit that form your dashboard will be revealed with your score along with the report.

How much CIBIL Score is Good for Loan & Credit card?

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CIBIL Score is Good for Loan
Source CIBIL

300-599 – An individual will not qualify for any loan. Such a low score is a warning signal to banks that you do not have a history of good credit behavior. Most banks will not accept your application right away.

600-749 – It is not a very good score, An individual might have a chance of being approved by some banks or financial institutions.
They might be willing to look at other key factors that will impact your repayment ability in the future like the stability of employment, monthly salary, the extent of your other liabilities.

More than 750 – An individual has a very good chance of obtaining any loan with such a score. An individual can also enjoy the following advantages

1# The approval process will be much faster.
2# The loan amount might be larger.
3# You might be able to negotiate a lower interest rate.


Loan

Loan NameScore
Personal loanBetween 720 and 750.
Business loan700 or more.
Home Loanlower than 750.
Car Loanmore than 750.
Education Loan700 and above
Loan Against Property700+
Loan against securities700+

Credit card

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Card NameScore
All Types of Credit Cards750+

How Can I Improve my CIBIL Credit Score?

Improve my CIBIL Credit Score
Source CIBIL

Time needed: 5 minutes.

Improve my CIBIL Credit Score

  1. Pay your Credit Cards or Loan on Time

    Payment delays for EMIs not only force you to pay the penalty but also lower your credit score.
    Therefore, if you are thinking to improve your CIBIL score pay your dues on time and rack up a good score.

  2. Multiple Loans

    If individuals opt for multiple loans at the same time, it will be evident that individuals are in an unforgiving cycle with insufficient funds.
    As an output, the individual credit scores will decrease further. How to improve this score immediately? When an individual takes a loan, repay it successfully, it will give your credit score a boost.

  3. Check Your Credit Report

    Credit Information Bureau (India) Limited, may make mistakes when it comes to updating your records, incorporating wrong information against your report, and delaying recording details.
    Sometimes a loan you may have repaid may not have been updated in the CIBIL report, which could have a negative impact on you. If you notice such errors, get them rectified instantly.

  4. Joint Applicant

    If an individual is a joint application for a loan someone else has taken, and they have defaulted on payments, then you too will lose out on your score as it will reflect in your report as well. The perfect way to avoid this is to ensure that the loans and cards are being paid for on time.

  5. New Credit Card

    While applying for a new credit card, it is the best idea to check your credit eligibility and apply to banks or financial institutions where the chances of your loan application getting approved are higher. This is because not only spending excessive funds on your credit card but applying for credit cards from various banks can adversely affect your credit score.

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