What is a CIBIL score? How does one check their CIBIL score? What is the impact of a CIBIL score, when applying for a loan?
September 20, 2021
The Credit Information Bureau (India) Limited (CIBIL), is the most popular of the four credit information companies licensed by the Reserve Bank of India. There are three other companies licensed by RBI, to function as credit information companies. They are Experian, Equifax and Highmark. However, the most widely accepted credit score in India is the CIBIL score.
CIBIL Limited maintains credit files of 600 million individuals and 32 million businesses. CIBIL India is part of TransUnion, an American multinational group. Hence credit scores in India are known 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 the 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 it usually takes between 18 and 36 months or more of credit usage, to obtain a satisfactory credit score.
How does one check their CIBIL score?
To get a free CIBIL Score and Report, just follow the mentioned process.
Visit https://www.cibil.com/freecibilscore and follow the steps:
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 CIBIL score of the applicant and his/her reports. 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 whether the loan /Credit Card should be sanctioned or not. Typically, a score of 700 is considered good.
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