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What is CIBIL Rating? 10 things you need to know

By Finserv MARKETS - Aug 27,2019
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CIBIL Score Things to Know

If you have ever attempted to get a loan or a credit card sanctioned in India, chances are you are already familiar with the terms ‘CIBIL rating’. The score has been traditionally used by lenders to judge a loan applicant’s creditworthiness. Today there are options like Bajaj Finance Personal Loan which do not ask for your CIBIL score when you apply for a loan. With the Bajaj Finance Personal Loan EMI calculator, available on the website, you can check what your Equated Monthly Installment (EMI) will be while availing a loan.

However, if like me, you have wondered at the mechanisms behind this rating that dictate how credit-worthy you are, you need to read this article.

What is CIBIL?

Transunion CIBIL Limited (formerly Credit Information Bureau India Limited) is one of India’s first credit bureau or credit information companies that prepares credit reports which are utilized by lenders to evaluate an individual’s or an institution’s creditworthiness, or in other words, their ability to repay any financial credit they may avail.

What is a CIBIL rating?

The CIBIL Transunion Score is a 3-digit number ranging from 300 to 900 which demonstrates an individual’s or an institution’s (like a company’s) creditworthiness. A high CIBIL score represents a high amount of creditworthiness, thereby making it easier for someone to have a loan sanctioned.

How is your CIBIL score calculated?

Banks and financial institutions send personal and credit information to credit bureaus like CIBIL which then accumulate this information to prepare your credit report and thereby calculate your credit (CIBIL) score. While assigning the score, CIBIL collects information like history of loans, credit cards, total available credit balance and the duration of loans availed. You can also check CIBIL score for free using our smart financial health check tool.

What are the factors that affect your CIBIL score?

Your credit repayment history which includes how responsibly you have availed and repaid financial credit and loans is an important factor in calculating your CIBIL score. Other factors include your credit utilization limit, the number of applications you make for financial credit, loan repayment terms, the percentage of unsecured loans, etc. If you are acting as a guarantor for another person’s loan and that person defaults on their repayment, it will negatively impact your CIBIL score.

Why do you need a good CIBIL score?

A good CIBIL score tells your prospective lender that you are creditworthy and will repay any loan you avail in a responsible manner. Aside of faster loan sanctioning, a good CIBIL score also ensures faster disbursement of the loan amount and will allow you to choose between different lenders – which means, you can opt for lower interest rates. If your CIBIL score is bad, lenders are more likely to offer you higher rates of interest. Bajaj Finserv Personal Loan EMI calculator allows you to instantaneously find out how much EMI you are likely to be charged based on your salary and loan requirements, with no credit check.

How do you find out your CIBIL score?

The Reserve Bank of India (RBI) mandates that credit bureaus in India namely, CIBIL, CRIF High Mark, Equifax and Experian have to provide a free credit score to individuals once a year. Interested people can approach the bureau, furnish pertinent documents and receive their credit score. Several online portals are also operational in helping individuals acquire their credit report.

Check CIBIL Score

What is a good CIBIL score?

The CIBIL rating ranges from 300 to 900. A score of 750 or above is considered good by banks and financial institutions. A lender needs a score of 750 credit score or above to ensure easier processing and approval of any financial credit you may require. Bajaj Finance Bajaj Finserv Personal Loan are now being offered for individuals looking to avail personal loans with no credit check.

How can you improve your CIBIL score?

You can keep your CIBIL score high or even work towards improving your low credit score by keeping in mind these few tips.

  • Keep your credit balance low
  • Apply for new credit cards only after cancelling old ones
  • Limit spending on your credit card to less than 50% of the available limit

Find out your credit score from the bureau and analyse the report thoroughly to identify ways to improve your CIBIL rating.

How can your CIBIL score drop?

Your CIBIL score can drop if you have too many unsecured loans in your loan portfolio if you delay or miss your credit card or Equated Monthly Installment (EMI) payments, if you make multiple loan applications or if you spend too much on your credit card limit even when not it is not essential.

What information is contained in your CIBIL report?

CIBIL provides individuals with a Credit Information Report (CIR) which contains detailed information on the credit you have availed, including any loans or credit cards. Aside of the Credit Score which indicates your creditworthiness, the report also contains your personal information as reported by banks, your contact information, your employment information, your account information which also includes your payment behavior as well as enquiry information which details which lenders are requesting for or enquiring for your credit details.

With the proliferation of lenders today, multifold options abound for you if you have a good CIBIL score. Certain lenders will also choose to sanction your loans based on other criteria, which do not take into account your credit rating. For a personal loan with no credit check, Personal Loan, available on Bajaj Finserv MARKETS, is a viable lender that approves loan requests online in three minutes and even disburses money to your bank account within 24 hours.

Free CIBIL Score check at Finserv MARKETS

Your CIBIL score decides your reliability as a borrower. Hence, financial institutions make a note of your CIBIL score before approving your loan application. It is essential that you check CIBIL score to get an idea regarding whether your loan application will be accepted or not. CIBIL score can be checked in two ways, i.e through hard inquiry or soft inquiry. Hard inquiries are usually conducted by lenders while reviewing your credit application. A hard inquiry can have a negative impact on your credit Score.

Finserv MARKETS will make a soft inquiry to avail your credit Score from CIBIL. Therefore, your credit score will not get hampered in any manner. Moreover, checking your Credit Score at Finserv MARKETS is absolutely free.

Some of the major benefits of checking the CIBIL score at Finserv MARKETS are mentioned below:-

  • Personalized Report

You get a personalized report that consists of your CIBIL Score and your financial performance across various parameters. This report will give you a better understanding of your finances and allow you to make a well-informed decision.

  • Best insights to achieve financial goals

Apart from CIBIL score, the report will give you insights that will help you make your future financially secure. It will also provide you with smart investment options that can help you achieve your financial goals with ease.

  • Reliable

With more than 100 million+ customers PAN India, Bajaj Finserv has become a trusted financial partner for citizens across the country. These features of Finserv MARKETS will help you be financially stable and make a sound decision while availing credit.

Bajaj Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!

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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