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How to Check and Improve CIBIL Credit Score for Business Loan

By Finserv MARKETS - Dec 4,2019
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Improve CIBIL Credit Score for Business Loan

The Credit Information Bureau India Limited (CIBIL) issues a credit score based on your past dues and repayment history. Lenders heavily rely on the CIBIL credit score to judge your creditworthiness. The lowest score is 300 and the highest is 850 Any score which is on the higher side means that you have a good credit history and higher chances of the loan application being accepted. A low score indicates that you are unable to pay your debts and hence, the chances of your business loan being accepted are quite low.

Understanding CIBIL scores

You need to understand the varied range of CIBIL score and decode them. Any score ranging between 850 to 900 is considered excellent and shows zero defaults or delay in repayment of the loan. With a high score, the application will be approved easily. A CIBIL score between 750 to 850 means above average and almost 80% of the applications will be approved. Further, a score between 700 to 750 is considered average and an applicant has to go through inspection from the lender in order to access creditworthiness. A score between 500 to 700 is below average which shows that the applicant has defaulted in repayments and it can become difficult to get an approval on loans. Lastly, a score ranging between 300 to 500 is considered poor and it will become difficult for an individual to get credit from any bank or lender. Even if the loan is approved, the applicant might have to pay a high business loan interest rate.

Ways to check the credit score

You can check the credit score for free on CIBIL’s official website. To check the credit score you need to:

  • Create an account by providing basic details like username, email ID, password and your mobile number
  • Verify your identity by providing details about your PAN and Aadhaar number
  • Enter the one-time password that you receive

By following the aforementioned steps, you will get your CIBIL report immediately.

Ways to improve your credit score

You are now aware that a high credit score means a quick approval of your loan application. You can also enjoy additional benefits like low business loan interest rate, high loan amount and several other facilities. You can improve your credit score using the below-mentioned tips:

  • Do not default in the payments; ensure that you make all the payments on time and avoid delays or defaults
  • Do not apply for multiple loans in a short period
  • Ensure that your credit portfolio has a strong mix; build a portfolio with secured and unsecured loans
  • Reduce the credit usage to 50% of your limit
  • Make sure that the credit report contains correct data and information

You can also read about why to aim for high credit score.

Check your credit score before you make a loan application. You can use the business loan calculator to estimate the EMI payable on a specific loan amount. It will help you make a well-informed borrowing decision.

Get a business loan available on Finserv MARKETS for an amount as high as INR 30 Lakhs. Minimal documentation, instant approval and quick disbursal of the loan amount are some of the other advantages of Bajaj Finserv Business Loans. However, before applying for a business loan, make sure that you have a good credit score. A high credit score will help you avail a higher loan amount at a reduced rate of interest. You can maintain a high credit score by making timely repayment and limiting your credit utilization rate. Lastly, do not forget to go through the terms and conditions of the loan agreement carefully before signing it.

Also read how much time to improve CIBIL Score for business loan

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522