Most lenders require you to have a spotless credit report and a high CIBIL score to qualify for financing. This is especially true for collateral-free offerings such as a personal loan, as it helps the lender to be sure of repayment. It is advised that you check your CIBIL score before you apply for any investment to minimize the chances of rejection. However, if you are a first-time loan applicant and have no idea about what a CIBIL score is or how to access it online, read on for a rundown on all you need to know about your CIBIL score.
What is a CIBIL score?
A CIBIL score is a numerical representation of your creditworthiness and is indicated by a figure between 300 and 900. The higher your CIBIL score is, the better are your chances of obtaining finance and on favorable terms too. CIBIL scores are offered by the Credit Information Bureau Ltd. of India, an RBI-authorised agency. It computes scores based on at least six months’ worth of financial data and factors in parameters such as your repayment history and behavior, past loan settlements, write-offs and defaults, the proportion of debt to your income, and your credit utilization ratio to calculate your score.
How are CIBIL scores categorized?
Given their importance, lenders check CIBIL scores and note the range they fall in before approving a loan application. The ideal credit range contains scores of 750 and above, and scores closer to the 300-mark are considered to be unfavorable. For a clearer understanding of the credit score ranges, find the classification below.
● NA/NH: ‘Not applicable’ or ‘No history,’ indicates the lack of credit history
● 300-549: Considered as inferior, scores in this range are indicative of defaults in the past
● 550-649: Considered as average, ratings in this range indicate a struggle to service debt
● 650-749: Considered to be good, with a score in this range you may obtain financing, albeit on your lender’s terms
● 750-900: Considered to be excellent, with a score in this range you can receive funding on favorable terms
How to maintain a good CIBIL score?
Lenders check credit scores offered by TransUnion CIBIL frequently, so you may want to know about ways to strengthen your score. CIBIL ratings are based broadly on four parameters: past performance, credit type and duration, credit exposure, and other factors. Hence, what you should do to boost your score is to pay the current loan EMIs on time, clear outstanding credit card dues, limit your credit utilization ratio, and fix errors in your credit report, should you find any.
How to check your CIBIL score?
CIBIL offers you a copy of your credit report and allows you to check your CIBIL score for free once a year. You can do so via the official website. The process involves furnishing personal details, creating an account, verifying your identity, and finally, accessing your score. As you go about the steps, make sure to enter correct values, especially in the PAN card field, and select the subscription plan that best suits your needs. If obtaining your CIBIL score is a one-time requirement, you can skip this step. Check how to get personal loan with low cibil score.
Having considered the essential aspects of a CIBIL score, remember that having an excellent rating helps you easily qualify for offerings such as the Bajaj Finserv Personal Loan. You can Check Here how to apply for a personal loan offered by Bajaj Finserv. This loan gives you immediate access to a sum of up to Rs.25 lakh, which you can repay over a flexible tenor of up to 5 years. Moreover, it offers you the Flexi loan facility, using which you can borrow from your approved sanction in parts, multiple times, without various applications. Also, to facilitate easy repayment, Bajaj Finserv charges interest only on the withdrawn amount and allows you to pay interest-only EMIs at the start of the tenor.
Once you check your CIBIL score and improve it, proceed to apply for this loan. Check your pre-approved offer from Bajaj Finserv to enjoy instant access to feature-rich financing.