What is the CIBIL score that is checked when giving a loan?
Credit score plays an important role in taking loans and credit cards. After filling the application form and handing it over to the lender, the lender first checks the CIBIL score and report of the applicant. Poor credit score can also cause the application to be rejected.
Many people take out a bank loan when buying a home, property, or car. Because it is difficult for many people to pay such a large amount at the same time.
For this many people take home loan or car loan from the bank. But when lending banks or financial companies check the person’s Credit Score or CIBIL score, this determines the overall financial status of any applicant.
When it comes to getting a Home Loan, Mortgage Loan, Business Loan or Credit Card, two terms often come up – Credit / CIBIL score and CIBIL report.
At the same time, the question also comes to mind that what are these two things and what do they have to do with loans and credit cards.
It is not okay to ignore credit scores and CIBIL reports. In this report we are telling you some important details about these two
But do you know the meaning of Credit Score or CIBIL Score?
Difference between Credit Score and CIBIL Score.
The gap between credit score or CIBIL report
Credit score or CIBIL report is a term that is considered important when taking out a loan. Credit score is used to know the financial status of the person concerned. If a person pays the loan instalment on time, his credit score is considered good.
Credit score first
A 3 digit credit / CIBIL score is an important measure of a person’s creditworthiness. It plays an important role in the application process for a loan or credit card.
After the applicant fills out the application form for the loan or credit card and hands it over to the lender, the lender first checks the applicant’s CIBIL score and report.
There are four credit information companies or credit bureaus in India, TransUnion Sibil, Equifax, Experian and CRIF Highmark.
These institutions are licensed to collect and maintain financial records of individuals and to generate credit reports/credit scores based on this data.
How CIBIL score is considered good.
The CIBIL score is between 300 and 900 and the closer to 900, the better the chances of getting a loan approved.
Sibyl scores from 300-579 are considered poor, satisfactory from 580-669, good from 670-739, very good from 740-799 and scores from 800-850 are considered the best. Credit score can never be zero.
If a person has no credit history or is very new to credit, they may be associated with a credit score of “NA” or “NH”.
Bad CIBIL Score can get rejected in the application
If the CIBIL score is low, it is feared that the lender may not consider the application further and reject the application at the same time.
If the CIBIL score is high, the lender will look at the application and its details to check whether the applicant is eligible for credit. However, CIBIL does not decide in any case whether the loan/credit card should be approved or not.
Now know what is CIBIL report
CIBIL Report ie CIR. It is the credit payment history of an individual, which helps the lender to assess the eligibility of the loan applicant.
How a person repays his debts in a given period, his complete account remains in the CIBIL report. If the person has become insolvent or the loan has been repaid late, then this detail also remains in the report.
Overall, the credit report shows the number of times a person applied for a loan or credit card, from which bank/financial institution the loan or credit card was received and whether the loan or credit card EMIs and bills were paid on time.
The credit report also contains information about which banks/NBFCs have checked your credit report.
How to check credit
You can use CIBIL’s website or other banking service aggregators’ websites to check your credit score. You can check the score by filling in your details in the options given in it.
You can also check it out by subscribing to Sibyl’s website if you want. You can also check it for free. However, the free CIBIL report can be viewed only once a year.
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