CIBIL Score what everyone should Know

cibil score

Whether you’re new to the scene of loans or have found yourself applying for loans on a regular basis, the issue of credit/CIBIL ratings can be perplexing and even frightening. Having a strong credit score, however, is critical if you want to reach major financial milestones in your life, such as purchasing your first home or upgrading that old automobile. After all, banks use your Credit score to determine whether you should be eligible for the best or worst loan rates, or even if they should give you money at all!

Knowing how to enhance your CIBIL score pays you big time. But before we go into some recommendations, let’s define a CIBIL score.

What Is CIBIL In Its Complete Form?

If you’re curious, “CIBIL” stands for Credit Information Bureau (India) Limited, India’s first credit information company, which was founded in 2000. In India’s financial system, the company is extremely important.

What is a CIBIL score, and how do you get one?

Simply put, your CIBIL score reflects your creditworthiness, or how dependable a borrower you are. Lenders are more willing to provide you with a loan if your credit score is good.

What Factors Go Into Calculating Your CIBIL Score?

Your CIBIL score is determined by the amount of money you’ve borrowed in the past. Your credit score is affected by factors such as your credit limit utilization rate, payment rate, length of payment history, whether your borrowing is secured, and the number of credit inquiries. Every time you take a loan or apply for a loan from a bank or NBFC, CIBIL receives the information and incorporates it into your score. That score is subsequently made available as a reference to all other lenders the next time you apply for a loan.

What Impact Does My CIBIL Score Have On My Loan Chances?

Your CIBIL score is calculated between 300 and 900. The closer you go to 900, the more your loan lender/bank will be confident in your ability to repay the loan. As a result, the higher your chances of getting your loan accepted. You’ll be happily handed credit card, given access to the best interest and insurance rates, and even be able to land your ideal job (yep, potential employers will occasionally want to see your CIBIL scores!)

Your CIBIL score will be -1 if you have never borrowed before and so have no credit history.

A CIBIL score of 750 or more is considered good. Banks would almost never provide you credit if your credit score is below 700, especially if the loan is unsecured. Some NBFCs will be more flexible, but the rates you’ll be paying will be significantly higher.

To get approved for a loan with NIRA, you must have a minimum CIBIL score of 681. Borrowers with a -1 credit score are also eligible to apply.

If you’re in desperate need of cash, you already know that a poor CIBIL score can make things exceedingly difficult. For example, in circumstances of debt payback or medical emergency where obtaining a loan is the only option, the final decision is based on how near your CIBIL score is to 900.