What CIBIL Score Minus 1 Means?

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A CIBIL Score-1 (also denoted as ‘No History’ or ‘NH’) indicates that the borrower has no credit history.

An individual may have a CIBIL-1 score as a result of the following scenarios:

If there is no credit history or record in the name of the borrower
If the individual has not taken a loan or applied for a credit card in his or her name in the past 2 years
If the individual does not have direct credit exposure in their name (For example, if people are using add-on cards)

While a few banking institutions or non-banking financial companies may still lend money to an individual after a credit appraisal, some may directly reject the loan application of an individual with a CIBIL score of -1.

How do Banks Assess an Applicant’s Repayment Capability if They do not Have a Credit Score?

Apart from the credit score parameter, banks analyse the repayment capability of a borrower through these ways:

Savings Account Balance

Maintaining a balance that can be considered sufficient in a savings account may help the lender get a picture of your savings and expenses.

For example, if you consistently maintain adequate funds in your account, it would give the lender a sense that your financial position is reasonably stable.

On the other hand, a bank account with minimum required balance or below could tell the borrower that the financial position is not ideal for someone who will need to pay a certain amount every month towards the loan.

Cheque Bounces

Such a situation may make a lender all the more sceptical about lending any money to the borrower. Hence, disciplined honouring of cheques that are issued is considered to be a plus factor.

Getting Secured or Small Loans

First-time borrowers may find it easier to get loans for short repayment tenure. You can even opt for student credit cards or secured credit cards of entry level.

Banking institutions are generally more open to offering small secured loans to new borrowers. Note that the timely repayment of such loans will gradually increase their credit score.

Employment Situation

If the borrower is working with a reputed private organisation or a public-sector company at a respectable position, the associated risk is then considered to be lower than that of a person who works in a start-up.

For example, in a temporary profile, these aspects are considered because the job of a borrower serves as a guarantor for the loan amount.

How to Apply for a Loan with a CIBIL Score of -1?

Contact your bank executives and explain why you are a creditworthy applicant, even without a credit score or history.

You must submit proof of income and a letter from your employer, among a few other documents. All of this must be done to prove that the score is an inaccurate representation of your creditworthiness.

Once you have secured the loan, repaying the same on time will impact your score positively. Ensure that you pay every EMI payment on time.

You must also try not to foreclose or arrive at a ‘settlement’ with the bank. Remember, your repayment information and remarks given by the bank will be included in your credit report.

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What do you mean by CIBIL -1 score?

A CIBIL minus 1 score indicates that an individual has no credit history. If the individual's CIBIL score is depicted as -1, it says that the borrower has not taken any form of a credit card or loan either to date or in the past 2 years.

What if my CIBIL score is negative?

A negative CIBIL score indicates that no credit history is available. If your CIBIL score is negative, you must consider applying for a credit card to start your credit history. It generally takes approximately 6 months of credit history to calculate a CIBIL score.

How is a CIBIL score of 0 different from a score of -1?

If you have a score of 0, it means NA or No Activity. Simply put, this score implies that you have just begun your financial journey. TransUnion CIBIL assigns this score if your credit history is less than 6 months.