Here How To Check Your Cibil Score Before Applying For Any Loan

If you’re considering applying for a home loan, car loan, or personal loan, it’s essential to understand the significance of your creditworthiness, which is reflected in your CIBIL score. CIBIL score is a three-digit number that reflects your credit history and repayment habits and is an essential document that lenders consider while approving loan applications.

When you apply for a loan, banks and financial institutions do credit score checking to determine your creditworthiness and the risk involved in lending you money. If you have a good CIBIL score, you are more likely to receive loan approvals smoothly and at lower interest rates. Therefore, checking your CIBIL score before applying for a loan is crucial to ensure you are aware of your creditworthiness and can take measures to improve it if necessary.

CIBIL score Range

An individual’s CIBIL score is determined by various factors, such as their previous loan history and its repayments, credit utilisation, credit enquiries, and the type of credit utilised. The CIBIL score ranges from 300 to 900, with 300 being the lowest and 900 being the highest score achievable. An excellent CIBIL score is 750 or above, while a score between 650 to 749 is considered good, and a score above 750 is considered excellent.

How to Check CIBIL Score by PAN Card

To learn how to check your CIBIL score, you can follow simple steps. To check your credit score, you can start by visiting the website of a financial institution, like Bajaj Finserv, and searching for the section that offers credit score checking. Another option is to use the Bajaj Finserv Credit Pass service, which allows for unlimited credit score checking and offers attractive loan options.

Once you find the credit score checking option on Bajaj Finserv, click on the option and fill in the necessary details, including your name, date of birth, PAN card number, and contact information. After providing all the required information, verify the details and submit the form. Your CIBIL score will then be generated, and you can view it online. It’s essential to check your CIBIL score regularly, as it provides insight into your creditworthiness and helps you plan your financial goals accordingly. 

Factors Affecting your CIBIL Score

Payment History

Timely paying your credit card bills and loan EMIs is a simple way to maintain a high credit score. Failure to pay bills on time or to default on EMIs can negatively impact your credit score, indicating poor credit management. 

Credit Exposure

Having multiple loans and credit cards simultaneously don’t significantly affect your credit score. However, a high credit utilisation ratio can have a negative impact. Research suggests that the ideal credit utilisation ratio is 30%, so you should aim to spend no more than 30% of your credit limit. 

Credit Type and Duration

Factors such as the length of your credit history and the duration since opening your first credit account are considered when determining your credit score. CIBIL evaluates the average duration for which you have held a credit account. A long credit history with a track record of timely repayments indicates that you are a low-risk borrower.

Benefits of Good CIBIL Score 

• Easier loan approval – A high CIBIL score improves your chances of getting loan approval quickly and easily.
• Lower interest rates – Banks and financial institutions may offer lower interest rates to those with a good credit score, saving you money in the long run.
• Better bargaining power – With a good CIBIL score, you can negotiate with lenders for better terms and conditions.
• Higher loan amount – A good CIBIL score can help you secure a higher loan amount as lenders perceive you as a low-risk borrower.
• Faster loan processing – Banks and financial institutions are more likely to quickly process loan applications of those with a good credit score.
• Credit card approval – A high CIBIL score increases your chances of being approved for a credit card, which can help you build your credit history.
• Improved credit limit – A good credit score may also result in a higher credit limit on your credit card.

Things to do to Improve your CIBIL score

• Review your credit report – Credit score checking will help you to identify any discrepancies, errors or fraud. Credit score checking can be done by obtaining a credit report from Bajaj Finserv Credit Pass service.
• Pay bills on time – Late payments, such as credit card bills, loan EMIs, utility bills, etc., can negatively impact your CIBIL score. Ensure you pay your bills on time to maintain a good credit score.
• Maintain low credit utilisation – Credit utilisation is the percentage of your credit limit that you are using at any given time. Keep your credit utilisation ratio below 30% to improve your credit score.
• Avoid applying for multiple loans – Applying for multiple loans quickly can make you appear credit-hungry, negatively impacting your credit score. Limit your loan applications to the ones that you need.
• Maintain a long credit history – A long credit history with a good repayment history can positively impact your credit score.

Conclusion

Credit score checking before applying for any kind of loan is crucial for a smooth and hassle-free process. A good CIBIL score not only increases the chances of loan approval but also helps in securing a lower interest rate and better loan terms. By following the steps mentioned above and by regularly checking credit score checking and improving your credit score, you can ensure financial stability and achieve your financial goals with ease.