A CIBIL score is an important factor that lenders consider when approving a loan application. It reflects a borrower’s creditworthiness based on their past credit behaviour. A high CIBIL score increases the chances of getting a loan at favourable interest rates, while a low score may lead to rejection or higher interest charges. Understanding how to check your CIBIL score and monitor it regularly can help in maintaining a strong financial profile. This article explains the importance of a CIBIL score, how it impacts loan approvals, and the step-by-step process to check it.
What is a CIBIL Score?
A CIBIL score is a three-digit number ranging from 300 to 900, assigned by TransUnion CIBIL, a credit bureau in India. It is based on an individual’s credit history, including loans, credit cards, and repayment behaviour. A score closer to 900 is considered good, indicating responsible credit usage. Lenders rely on this score to assess the risk of lending funds to an applicant.
How to Check Your CIBIL Score Online?
The steps to check your score through the official CIBIL website are as follows:
Step 1. Visit the CIBIL Website
Go to the official website of TransUnion CIBIL (www.cibil.com). This is the most reliable platform to check your score.
Step 2. Create or Login with an Existing Account
If you are a new user, sign up using your name, date of birth, PAN card number, and email ID. If you already have an account, just log in with your credentials.
Step 3. Choose a Subscription Plan
CIBIL provides free and paid credit score reports. The free version gives one report annually, while paid plans give more frequent updates and more information.
Step 4. Confirm Your Identity
You will be required to undertake an authentication procedure by responding to security questions or confirming information by OTP verification over your registered phone number.
Step 5. Check Your CIBIL Score
On verification, the CIBIL score and the credit report appear on the screen. The report contains information relating to previous loans, usage of credit cards, and repayment patterns.
Other Methods to Check CIBIL score
Besides the CIBIL website, some banks and financial websites enable users to view their credit scores for free.
- Through Banks and NBFCs: Many banks and Non-Banking Financial Companies (NBFCs) provide free CIBIL score checks to their customers via internet banking and mobile apps.
- Using Third-Party Financial Apps: Several financial service providers and loan comparison websites offer free CIBIL score checks. These platforms may require basic details and PAN card verification to generate the score.
How to Improve Your CIBIL Score?
If your CIBIL score is low, taking corrective steps can help in improving it:
- Pay on Time: Pay EMIs of instant loan online and credit card bills on time or even in advance.
- Lower Credit Usage: Restrict the use of credit cards and not exceed card limits.
- Avoid Making Multiple Loan Requests: Make new or additional credit requests only when required, to avoid hard inquiries.
- Check Your Credit Report: Periodic checks allow for the detection of errors and resolving discrepancies.
- Maintain a Good Credit Mix: A mix of different types of loans can enhance your score.
Why is CIBIL Score Important for Loan Approval?
A good CIBIL score enhances the prospects of loan sanction, whereas a poor score makes it hard to obtain credit. Here’s why it is important:
- Loan Eligibility: It is a condition with most lenders that they insist on a minimum CIBIL score. A score of over 750 is generally desired for sanction.
- Interest Rates: High scorers usually receive lower interest rates, thereby cutting the cost of borrowing.
- Loan Amount: A high score builds chances of securing a higher loan amount.
- Quicker Approval: A good credit report makes the verification process quicker, allowing for faster approval of the loan.
How Often Should You Check Your CIBIL Score
It is recommended to view your CIBIL score at least once every few months to keep your credit profile healthy. Regular monitoring assists in identifying any unauthorised transactions or errors in the report.
Conclusion
Checking your CIBIL score is an important step before applying for a loan, as it helps in understanding your creditworthiness. A good score enhances loan eligibility and reduces interest rates, whereas a poor score can result in rejections or increased expenses. Keeping track of your score, being disciplined in credit behaviour, and resolving any errors in your credit report can aid in the effective management of your financial well-being. By keeping yourself updated on your CIBIL score, you can take appropriate measures to enhance your credit record and increase your possibility of availing of a loan whenever required.
