CIBIL score, also known as credit score, reflects an individual’s credit history. It is one of the first things that all banks and financial institutions check before sanctioning a loan or a credit card. The Credit Information Bureau (India) Limited (CIBIL), which is one of the country’s credit bureaus authorized by the Reserve Bank of India, generates the credit score based on the individual’s financial behaviour, previous records and repayment history. It is important for all potential borrowers to check the CIBIL report online before applying for a loan.
What Is an Ideal CIBIL Score?
The CIBIL score is a three-digit number ranging from 300 to 900. While an individual’s credit score varies and can fall anywhere in between, a range between 750 and 900 is the most desirable as it implies the high creditworthiness of the borrower and assures the lender of their reliability and capability of repaying the full loan amount on time. As a result, the lender offers faster loan approvals at the most competitive interest rates starting at as low as 8.65%.
Next, a credit score between 650 and 749 is considered good and lenders often willingly approve the loan application without much hassle. However, the rate of interest offered in such cases may not be the best as desired.
A CIBIL score ranging from 550 to 649 falls under the average category. It basically indicates that the borrower is not too competent or regular with the payments and hence, demands a boost in the credit score. The rate of interest offered against loans are quite high as well.
Lastly, a credit score between the 300-549 range is considered poor as it shows that the borrower is struggling to repay their dues and is inconsistent with payments. This increases the chances of them being defaulters, which is why lenders are reluctant to sanction the loan.
The credit score is usually calculated on the basis of the borrower’s last 6 months’ financial data. Thus, in case you are planning on taking a loan, you should aim to achieve and maintain at least a score of 750+ to be able to get a higher amount at cheaper rates faster than expected.
How to Check CIBIL Report Online
Borrowers must learn how to understand CIBIL report online, through the chosen lender’s website or through a third-party website, whichever suits them. In any case, the following steps are to be followed –
Step 1: Logging in to the Website
Visit the official website of the lender or the third-party and access the ‘CIBIL Check for Loan’ option.
Step 2: Filling Up the Form
Fill in your personal details, such as name, DOB, address, mobile number, ID type, PIN code, loan history etc. in the online form.
Step 3: Verifying with OTP
The next step is to verify the details with an OTP (One-Time Password) sent to your registered mobile number or email ID.
Step 4: Checking the Current CIBIL Score
Once the verification is done successfully, your current CIBIL score will be generated along with the CIBIL report on the screen.
Step 5: Keeping a Copy of the Report
You can download and get a copy of the credit report for the record.
Borrowers must note that the CIBIL check for loan comes free of cost for a calendar year only. However, if they wish to monitor their current CIBIL score frequently without interruptions, they will need to subscribe to a plan. Furthermore, individuals must keep their credit card and loan history ready at hand since the credit bureau follows a rigorous authentication procedure that may demand some additional information.
However, keeping a track of the CIBIL report online alone is not enough. It is important to maintain a good credit score for future loans and credit card approvals.
5 Ways for Best CIBIL Score Check
Borrowers with current CIBIL score slightly on the lower side can follow these tips to increase the same –
- Be sure to pay your loan EMIs and credit card bills on time. You can set reminders to ensure you do not miss out an installment, or cut back on other expenses to make sure you are able to pay off your debts without defaulting.
- Curb your credit amount and limit expenses to reduce the the usage of credit cards. If you want your credit score to improve, try to keep away from too much debt despite attractive interest rates.
- Increase your credit limit to see an instant boost in your current CIBIL score.
- Try to opt for a longer tenor to reduce loan EMIs. That way, it will be easier to repay the monthly amount and you will be much more unlikely to default payments.
- Opt for a joint loan as a co-borrower but make sure your co-applicant has a good credit score and is consistent with their payments. The lender may consider your combined credit score and find you eligible for a loan in such cases.
There are various other ways through which you can boost your Cibil instantly. Once your CIBIL score is back on track, you can proceed to apply for a loan with a lender of your choice.
How to Apply for a Loan
After having your CIBIL check for loan, here is a step-by-step guide to how you can apply for one –
- Choose a lender and visit their website
- Select the loan you want to apply for and access the online application form
- Enter your personal and other details required in the form
- Check your eligibility to estimate how much you can borrow
- Provide some relevant documents (address proof, ID proof, income proof, Income Tax Returns proof etc.) and await verification
- After a successful verification, pay the required processing fee
- Upon successful payment, get the loan application approved
- Get the sanction letter from the authorized lender after a successful legal check
- Get the entire loan amount transferred to your bank account in 3-4 working days
Borrowers can also choose to apply through an app provided the chosen lending partner offers the service. It is one of the easiest and fastest ways to get apply for a loan.
Summary
CIBIL score check for loan is an important step before applying for one. Regular and timely checking of CIBIL report online can reveal your current standing on a scale of 300 to 900. The higher the score, the greater the chances of getting faster and cheaper loans. The aforementioned tips can help boost your current CIBIL score so you can enjoy a hassle-free, smooth loan application process and approval with the right lender.
