How important is your CIBIL Score/Report?

A person’s credit history is crucial and important for a variety of banking operations. In India, most people are usually aware of the term “CIBIL Score” but do not actually hold the exact knowledge related to its origin and existence. TransUnion CIBIL Limited is a renowned credit information company which holds the responsibility to manage credit files on almost 32 million businesses and 600 million individuals! The functions of CIBIL are focused at analyzing consumer borrowing and payment information for the motive of assessing loan risk and pricing credit.

What is CIBIL TransUnion score?

It is a numeric introduction to an individual’s credit history that helps in getting their loan requests assessed and approved. In the current financial setup across India, the various banks or financial bodies depend on CIBIL or credit scores for the evaluation of potential risk layered customers while loaning money to diminish their losses. Apart from this, the benefits of CIBIL score include securing quicker credit to consumers and even guiding loan providers to handle their business capably.

What is a Good CIBIL Score?

• It is important to know that, CIBIL scores are evaluated depending on numerous factors like a person’s payment history, loan accounts and their types, outstanding debt, length of credit history, etc. After the CIBIL score is measured, it is forwarded to the banks and financial organizations for assessment.

• In India, the credit score ranges from 300 to 900. If your score is nearer to the mark of 900, the credit institution will hold additional assurance in your ability to repay the loan. Therefore, you will have better chances of your application getting approved. In general, a score above 750 is regarded as a good credit score.

Importance of CIBIL Score

• The major usefulness of CIBIL scores is linked to accessing credit, exclusively loan sanctions. Various banks in the country check CIBIL score with CIBIL acting as the main medium, which helps determine a person’s creditworthiness that in turn proves advantageous for him/her to avail loans easier and quicker.

• Your CIBIL score is basically your first impression for the lender. The higher the score, the more fruitful your chances will be for the approval of loan/credit card.

• Whenever a borrower requests for a loan or credit card at a bank, the lender studies the CIBIL or credit score at the first place to determine whether the candidate is worthy for the loan or not. The lender will simply reject the request if the credit score doesn’t match up with the expectations of the bank or financial institution. On the other hand, if the CIBIL score is high, then, in this case, the lender would select the application and carry forward it to evaluate other aspects before finally approving the loan.

Why you need CIBIL Score?

With the analysis of CIBIL score one’s eligibility to access a credit card or loan is confirmed. For individuals, the credit or CIBIL scores can impact their financial journey that should be carefully understood and managed. Here are some of the prominent aspects that are influenced by your CIBIL score.

Interest Rates

The presence of a worthy CIBIL score would allow you to acquire the finest interest rates. It is seen that higher your credit score, the better interest rate you’ll be offered.

Credit Approvals

CIBIL score is one of the primary facets considered for the approval of credit from a bank or financial institution. The role of CIBIL in bank finance is stressed by the lender who analyzes the reliability of a candidate before granting them credit. If you have a bad CIBIL score, it will reduce your chances of getting credit without much trouble. Contrary to this, a good CIBIL score is a necessary thing for accessing a credit card, home loan, personal loan, car loan, mortgage loan, etc.

Housing Approval

The availability of a decent credit score is a positive factor for you to avail fresh housing loan. A decent CIBIL score behaves as a determining factor in this case.

Other Features

CIBIL score is known to enhance your capability to get positive loans, but it is also useful in getting approvals for a variety of plans such as smaller insurance premiums.

FAQs:

Q. I want to check my CIBIL record, how is it possible?

Ans. One can check his/her CIBIL credit score online. This is possible through the availability of an online score request form that is present on CIBIL’s official website. It serves as a convenient source since the entire process is fulfilled in a matter of minutes.

• The process starts with the filling of the online application form. You need to enter personal details like your name, address, date of birth, phone number, identity proof, income and address proof.

• After filling all these details, you need to submit the form. Post this step, you’d be directed to a page where you will have to make the payment. The charge for this service is Rs. 470 and payment can be accessed either through net banking, credit card or debit card.

• Once the payment is processed, you will have to present or submit few authentication details. After the authentication is passed, you will be presented your CIBIL score via e-mail within a time period of 24 hours.

Q. How many years CIBIL keep record of defaulter?

Ans. It is necessary to remember that, your record of default stays with CIBIL for a period of 7 years. However, post this period you can request for a credit, since the record is cleared.

Also Read: What is the Process of removing a name from CIBIL’s defaulter’s list?

Q. I am facing a dispute related to my CIBIL credit report. What to do?

Ans. If you have a dispute in terms of your CIBIL credit report, it is important for you to notify CIBIL in a proper writing. After the authority receives the grievance, they would connect with the creditors to confirm and balance the problem. Such a step is necessary so as to keep your credit record transparent and clear.