In this country, lending decisions by financial companies rely on several factors, including the credit score. This score is a significant metric that credit information bureaus use to evaluate a borrower’s creditworthiness. Prospective borrowers can check his/her credit score or CIBIL without login credentials to ensure quick approval of personal loans. However, there are certain related facts about which most individuals are still uninformed.
· In India, 2 out of 3 borrowers do not know their CIBIL scores, which amounts to 68%.
· Again, 52% of individuals who borrow funds are aware of the importance of the CIBIL score.
According to the Reserve Bank of India mandate, credit bureaus must enable free checking of credit scores to customers once a year.
Here are 6 essential things to know to check credit score –
1. An individual’s CIBIL score is accessible for free from TransUnion CIBIL’s website. On the home page, one needs to click the ‘Get Yours Now’ option available under the tab – ‘Personal’.
2. Customers can alternatively check their CIBIL without login credentials using their PAN cards and some other essential details only. It primarily involves 3 steps, including sharing of personal information, identity verification and finally, viewing of CIBIL report. This benefit is available free of cost on the websites of financial companies.
3. Sometimes, the report may show NH or NA keeping an individual in a neutral position. This signifies that either the person is new to this credit system or he/she has no such credit history. Note that credit bureaus assign scores only when a person has borrowed funds in the form of a credit card or loan from financial institutions. Getting a personal loan with a bad credit score is difficult and often leads to higher interest rates.
4. In India, there are 4 credit bureaus entitled to issue credit scores and reports. As their mechanisms and parameters for evaluating an individual’s financial profile are different, your credit score is likely to vary slightly with different bureaus. That’s nothing to worry about, as lenders consider scores from each of the bureaus and evaluate a personal loan applicant’s creditworthiness accordingly.
5. There exists a common misconception that checking this score frequently can impact it adversely. The fact is customers can check their CIBIL without login credentials multiple times for free with ease. Monitoring the score and reading credit reports from time to time shall help detect unintentional errors, unauthorised access and other issues effortlessly. One can also make an informed decision regarding one’s finances easily. Check out the things you can do to improve your CIBIL rating.
6. Credit scores primarily comprise the following:
· Credit utilisation ratio – 30%
· Repayment history – 30%
· New credit / Credit inquiries – 15%
· Credit availing duration – 15%
· Credit mix – 10%
The bureaus also consider credit cards, bill payments, loan defaults, existing debts, availed loan durations and more. These are instrumental to the determination of credit score as well as personal loan approval.
CIBIL score, issued by TransUnion CIBIL, is the oldest and widely accepted of the four credit information bureaus functional in India. It evaluates an individual’s credibility on a scale of 300 to 900, where 750 is considered the qualifying score to avail low interest personal loan from NBFCs and other lenders.
The credit score and report prepared by TransUnion CIBIL is in-depth and broad owing to millions of updates received from a widespread member base.
· Currently, TransUnion CIBIL has more than 5,000 members, including non-banking financial companies, conventional lending organisations, housing finance companies and others.
· Records of around 1,000+ million businesses and individuals are maintained by CIBIL.
Why should you check your CIBIL?
a. CIBIL score is one of the primary criteria to evaluate an applicant’s personal loan eligibility. The 3-digit numerical number highlights your creditworthiness or risk factor as a borrower. The higher your score, the more are your chances of availing unsecured credit.
b. Checking this score is one of the financial habits to avail a loan easily and faster.
c. It enables you to understand your current financial position.
d. As credit score is the numerical summary of your financial profile, checking it helps you identify errors or incorrect entries in your credit report.
Once you ensure to hold a good credit score, proceed to apply for a personal loan with trusted companies like Bajaj Finserv. One of the leading NBFCs in India, this lender provides up to Rs.25 lakh with exclusive features and against zero collateral.
In addition, Bajaj Finserv tailors pre-approved offers specifically for existing customers. These pre-approved offers make the procedure to avail credit simple and less time-consuming. You can enjoy such offers on personal loans, credit cards, business loans and various other financial products. Provide some of your essential details only to check your pre-approved offer online.
Whether you have it or not, building a great credit score over time is imperative for your financial stand. It enables you to utilise funds appropriately and also makes you eligible for credit like personal loans. Hence, follow a financial discipline when dealing with credit and check your CIBIL without login periodically before a lender surprises you with a loan rejection.