CIBIL Score for Car Loan

Maintaining a high CIBIL score is equally important, whether it is to be used for home loan, personal loan or even car loan. It basically helps in lowering your car loan interest rates from leading banks/NBFCs, as it depicts your creditworthiness and responsible credit behavior. In case of individual borrowers, a high credit score is essential to be approved for a car loan, as well as any other type of loan. The following sections discuss key aspects regarding how to achieve and maintain a good CIBIL score for a car loan.

Relevance of Good CIBIL Score for Car Loan

Credit score is a 3-digit numeric which is part of an individual’s CIBIL report. Your CIBIL report, also called the Credit Information Report (CIR), is generated based on the repayment tenue and handling of loans and credit cards in the past. Your CIBIL score sums up how well you have previously handled credit by assigning a number between 300 and 900. A good CIBIL score should be as close to 900 and at least 750 and above. Simply put, higher your score, higher are your chances of getting a car loan approved, whether for purchase of a new car or a used car.

But a good credit score will not only improve your chances of being approved for a car loan, but can also provide you better access to special offers. Such offers can include 100% car financing i.e. zero down payment, lower than usual processing fees, special low interest rates, etc.

Also Know: What are the Factors that Affect your CIBIL score?

While a good CIBIL score is definitely desirable to avail a car loan easily, a comparatively low CIBIL score, such as 650 or below does not automatically make you ineligible for a car loan. There is no minimum CIBIL score for car loan criteria as defined by lending institutions. However, a low score can typically results in car loan offers that have a higher interest rate or a higher down payment requirement.

How to Apply for a Car Loan with CIBIL Score?

Following is the step-by-step procedure to apply for a car loan:

Step 1: Fill out the car loan application form on Paisabazaar.com

Step 2: Check the car loan eligibility and select your preference from various categories, such as car type, city, brand, amount, repayment tenure, employment status, income, desired EMI, salaried bank account and personal details to further click on ”View All Offers”

Step 3: Select the most suitable loan offer or call Paisabazaar customer care for assistance.

Step 4: Get instant conditional e-approval as soon as you submit your online car loan application. As part of the application process, we will automatically check your CIBIL score to determine if it is suitable for availing the car loan of your choice and subsequently forward your application to your chosen lender.

Can I Get a Car Loan with a Low CIBIL Score or No Credit History?

While having a good credit score improves your chances of getting a car loan approved, a comparatively credit score or having no credit history (i.e. no prior loans/credit cards) does not automatically make you ineligible for a car loan. Please note that no credit history (denoted by NH/NA on a credit report) typically means that you have never had any loan or credit card in the past. In such cases, lenders typically consider the following factors in order to determine your eligibility for a car loan:

• Income: If you can prove that you have a stable source of income that can support the payment of monthly loan installments, your chances of approval will increase. Typically salary slips, Form 16, profit and loss statement, etc. need to be submitted with the lender as income proof documents.
• Loan Amount: A low credit score is indicative of higher risk of default for the car loan as compared to an applicant with a high score. Thus, you may decide to request a lower car loan amount and choose a higher down payment option to increase your chances of car loan approval.
• Co-applicant/ Guarantor: Apply with a co-applicant who has a better credit score and a more stable source of income. You may also consider getting a guarantor, so that the lender can trust not just your repayment capability but also your guarantor’s when approving the loan.

Steps to Download your Free CIBIL Report

Follow these simple steps to check and download your credit report for Free with NO impact on credit score and receive regular updates:

Step 1: Click here to get the free credit score/report

Step 2: Enter your basic details, such as gender, full name, email address and mobile number to verify using OTP authentication by clicking on ‘Get Free Credit Report’ button.

Step 3: After you click on the ‘Get Free Credit Report’ button, you will get credit scores from all 4 credit bureaus

Step 4: On CIBIL tab, click on ‘Download Report’ to further choose the language and month and click on the ‘Download’ button to download your CIBIL report

Step 5: Your Date of Birth (DDMMYYYY format) is the password of your CIBIL report.

FAQs

Q. How can I improve my credit score?

Ans. You can improve your credit score by:

• Making timely payment of loan EMIs and credit card dues,
• Maintaining a low credit utilization ratio, and
• Avoiding multiple loan applications.

You can also seek the assistance of Credit+ advisory services from Paisabazaar to improve and maintain a high credit score.

Q. Can I get a car loan with a low CIBIL score?

Ans. Yes, car loan without CIBIL score or low CIBIL score is still an available option for the customers. However, you should prove to the lender that you have a stable source of income and you may also have to arrange for a guarantor or settle for a lower loan amount.

Q. Can I check my CIBIL score for free on the TransUnion CIBIL website?

Ans. Yes. You can access your CIBIL report which contains your CIBIL score for free once a year directly from TransUnion CIBIL. However, Paisabazaar.com offers free CIBIL reports with monthly updates i.e. up to 12 free CIBIL reports a year at zero cost.

Q. What should I do, if there is an error in my CIBIL report?

Ans. You should raise an online dispute with CIBIL when there is a error in your report. Login to myCIBIL and navigate to Credit Reports > Dispute Center > Dispute an Item. This process is known as raising a CIBIL dispute.

Q. Is CIBIL score also important for a car loan intended to purchase a used car?

Ans. Lenders tend to use your CIBIL score as the first check to assess your creditworthiness, and hence CIBIL score is important for both new and used car loan.

Q. Can CIBIL score affect the interest rate on car loan?

Ans. Yes, CIBIL score can affect the interest rate of car loan. Generally, a high credit score translates to a lower preferential interest rate on a car loan. Credit score for car loan should be maintained high in order to have negotiation power and to avail added benefits.

Q. How can I check the status of a dispute raised online at CIBIL?

Ans. CIBIL sends weekly email notifications to convey the status of the dispute.

Q. How does CIBIL prepare credit report and score?

Ans. TransUnion CIBIL prepares your credit report and score on the basis of the data collected from its member credit institutions, which include banks and NBFCs all over India.

Also Read:

• What is a Credit Report? Steps to Download Credit Score Report
• What are the 10 best ways to build up my credit score?
• No Credit History? Here’s How You Can Build One
• CIBIL Commercial Report & CIBIL Rank
• Check Free CIBIL Score For SBI Loans
• CIBIL Score For Personal Loan
• CIBIL Vs Experian Vs Equifax Vs Highmark
• Common Myths About Credit Score