Are you planning to apply for a loan and quite nervous about its process? Before availing a loan, you should be aware of everything. For instance, you are applying for a loan, and a manager said, that your cibil score is low, and what will you do in that situation? If you have a lack of knowledge about cibil score and loans, you can’t get through this process easily. You must have the proper knowledge and take assistance from an agent, who tells you about every point of it. As well as helps you to apply for a loan easily. Here we are considering some points to assist you with your Cibil score when taking a loan.
“CIBIL Score plays a significant role in the Loan Approval Process. The higher the score, the higher are your possibilities of Loan Approval”.
Cibil score is the reputational security of a customer. It shows their creditworthiness, a good and high credit score shows you have managed your credit responsibilities perfectly and are likely to continue to do so.
What is CIBIL Score?
A CIBIL score is a numerical expression of three-digit that ranges between 300-900 based on general research and a detailed examination of a person’s loan files and history, indicating the creditworthiness of a person.
Why Should a CIBIL Score Be Good?
CIBIL score must be good to apply for a loan. CIBIL scores range from 300 to 900, but if your CIBIL score is 750 to 900 in your credit report is perfect and will qualify you for Personal Loans and credit cards.
How To Calculate A CIBIL Score?
Many of the customers don’t know how to calculate a cibil score So here we are helping you with some more details of a cibil score.
CIBIL Score implies on the chance of approval of loans. Check the table below for your cibil score.
|CIBIL Score||Credit Worth||Approval Probability|
|Less than 300||No||No Chance|
|Less than 500||Intense Action Needed||Very Low Chance|
|Less than 600||Urgent Action Needed||Low Chance|
|700-749||Good||Good Approval Chance|
|750-900||Excellent||High Chances Approval|
So, the report proves that a cibil score between 700-900 would be excellent to applying for a loan.
If you are wondering where to check your cibil score, you can do it easily by visiting the official CIBIL website. We will tell you the whole process of checking credit score.
|Firstly, Log on to the official CIBIL website and click on “Get Your CIBIL Score”.
Secondly, Please fill up the online form, which asks for personal details such as your name, date of birth, address, ID proof, past loan history and other relevant data they require.
Third, On filling the form and allowing changes, it will take you to the payments page.
How To Read A CIBIL Report? A Very Crucial Point To Take A Loan.
The cibil report is a detailed document that lights up your full credit history and record. This report includes many details such as your personal information, contact information, employment history and data, the credit limit on credit cards, credit balances and dates or records of your accounts.
There are some common parties who are interested in your cibil report at the time of applying for a loan.
- Banks and Non-banking financial companies
Your cibil report is an elaborate document with many sections. Therefore, it is essential to know how to read cibil reports. This will help you know your report better and even check if it goes with your credit history.
Along with reading the cibil report. You have to keep 3 points in your mind, which is very important at the time of taking a loan or reading a credit report. These 3 points are a very crucial part of every cibil report, so you must remember it.
Your Credit Summary – It includes the details of every kind of credit account that you had earlier and have currently, also considers the balance of the account.
Your Account History – It contains all details regarding your credit account. Lender’s name, what type of credit you borrowed, your account number with date when account had opened, recent payment, loan amount you have borrowed, your current balance, monthly balance (upto 3 years) of your repayment, these all things are included in your account history.
Your Public Records – It includes financial data both current and previous which includes criminal records, bankruptcies and disqualifications.
Advantages Of Good CIBIL Score
A good cibil score has sufficient benefits. Hence, a hopeful loan applicant must know the privileges before applying for a loan.
1. Higher Approval Chances
Every lender checks your credit score once you apply for a loan or credit card. This is known as a hard inquiry, and your credit score takes a hit whenever such an inquiry is undertaken. The impact can be adverse if your application gets rejected. But if your credit score is good, the possibility of the approval of your loan becomes high.
2. Low-interest Rates
The main advantage of maintaining a good credit score is low interest rates. Interest is charged based on the possibility of error.
If your cibil score is good and your creditworthiness with less default, it is reflected as a low interest rate.
3. Higher Limits
Your good cibil score reflects that you’re a good and responsible borrower. Hence the lender will not deny offering you a higher credit limit on your card or a comparably higher loan amount.
Along with the benefits, a borrower must be aware of the factors affecting Cibil score.
- Borrower’s Late Payment in previous loans
- High utilization of credit limit and doesn’t paid credit bills
- Multiple loans
These factors will be directly impacting a colossal hit to your credit score.
Many borrowers or customers have a question in their mind, that How to improve your cibil score?
To enhance your CIBIL score or credit score by paying all your outstanding loans and paying your monthly payment debts on time without any delay. To get a good credit score, use it as support, ask for reasonable interest rates from different lenders who are willing to offer you loans, compare the loans’ rates and conditions, negotiate if necessary, and then choose the most appropriate loan.