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CIBIL, an acronym for Credit Information Bureau India Limited, is a three-digit number between 300 and 900 that denotes an individual’s creditworthiness. The higher the CIBIL score, the better an individual’s chances of having the loan reviewed and approved. On the contrary, a low CIBIL score denotes an individual's credit-risky behaviour. One can check their CIBIL score online by submitting their PAN card details on the official website of CIBIL.
Since PAN is associated with most individuals' financial and bank accounts, checking your CIBIL score for free by submitting PAN details is one of the easiest ways to check one’s credit health.
Your CIBIL score is one of the first things an NBFC or lending bank would check before evaluating your loan or credit card application. Hence, checking your CIBIL score online for free by entering your PAN number will increase your chances of getting your application approved.
Planning on taking a loan? Want to make sure it is approved and processed quickly? Looking for a loan at a lower interest rate? Then make sure your CIBIL score is good. At this stage you may have more questions like what is CIBIL?
The CIBIL score explained
The Credit Information Bureau (India) Limited (CIBIL) is the most popular of the four credit information companies licensed by Reserve Bank of India. There are three other companies also licensed by the RBI to function as credit information companies. They are Experian, Equifax and Highmark. However, the most popular credit score in India is the CIBIL score. Let’s find out what is CIBIL score.
CIBIL Limited maintains credit files on 600 million individuals and 32 million businesses. CIBIL India is part of TransUnion, an American multinational group. Hence credit scores are known in India as the CIBIL Transunion score.
CIBIL Score is a 3-digit numeric summary of your credit history, rating and report, and ranges from 300 to 900. The closer your score is to 900, the better your credit rating is.
What does credit history and credit report mean in CIBIL?
When you want a loan you must ask yourself what is my CIBIL score? And will I be credit-worthy? Your bank will check your credit-worthiness through your credit history and make a credit report.
A credit history is a record of a borrower's repayment of debts. A credit report is a record of the borrower's credit history from a number of sources, including banks, credit card companies, collection agencies, and governments. A borrower's credit score is the result of a mathematical algorithm applied to credit information to predict how credit worthy you are.
A CIBIL credit score takes time to build up and usually it takes between 18 and 36 months or more of credit usage to obtain a satisfactory credit score.
Why does the CIBIL credit score matter?
The CIBIL score plays a critical role in the loan application process. When someone approaches a bank or a financial institution for a loan, the lender first checks the applicant’s CIBIL score and report. If the CIBIL score is low, the bank may not even consider the application further. If the CIBIL score is high, the lender will look into the application and consider other details to determine if the applicant is credit-worthy.
The CIBIL score works as a first impression for the lender, the higher the score, the better are your chances of the loan being reviewed and approved. The decision to lend is solely dependent on the bank and CIBIL does not in any manner decide if the loan/credit card should be sanctioned or not.
Typically, a score of 700 is considered good.
How to improve your CIBIL score?
You can improve your score by practising financial prudence – repay your Credit Card bills on time, don’t miss your loan EMIs, never default on debts, use credit wisely. You can read more on how to improve your cibil score .
Click here to know more about how to pay using Credit Card.
Looking to apply for a Credit Card? Click here to get started.
* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action.
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