A CIBIL score is a numerical value that determines how much money you can borrow. Credit scores in India range from 300 to 900 for those who have had credit for at least six months to a year. A score of 750 or higher on the CIBIL scale is considered outstanding. A score of 700-750, on the other hand, will be judged satisfactory. On the other hand, a score of less than 650 points is deemed low. When people apply for a loan or a credit card, lenders will examine their credit score. You should run a fast credit check before applying. You’re conducting a soft inquiry when you check your CIBIL Score on the credit bureau’s official website. Moreover, checking your CIBIL score too often might drop the score slightly.
Common Reasons to Check your CIBIL Score
If your CIBIL score is low and you have previously submitted a credit application without checking it, then it is most likely that the banks will reject your credit application. Banks and financial institutions in modern India are here to assist every individual in realising their ambitions. Banks are there to assist you financially in a variety of scenarios. It could be for wedding expenses, company finance, medical bills, auto purchases, vacation funds, home renovations, debt consolidation, unanticipated medical needs, or higher education. All you need is a high credit score to get approval on any type of credit application. Therefore, it is important to check your credit score on a regular basis. Moreover, here are a few common reasons to check your CIBIL Score:
Before applying for a Loan or a Credit Card
You should perform a credit check before applying for a personal loan or credit card. Because it helps determine the likelihood of obtaining credit. Your loan or credit card application may be approved fast if your CIBIL score is 750 or better. Take a peek at your credit report to see why it’s so low. Due to nonpayment of credit card bills and loan EMIs, credit ratings are typically bad. As a result, if you have a low CIBIL score, you must first improve it before applying.
Before switching your Existing Loan
Before switching your present loan to a new lender with a lower rate, check your CIBIL score. You may be able to negotiate a cheaper interest rate if you have an excellent credit score. Check your CIBIL score once you’ve completed the transfer to see if it’s changed. Each time you apply for a loan, a hard query is made on your credit report. Each hard inquiry, even if the lender rejects the application, has the ability to reduce the credit score.
In case of Debt Settlement
A debt settlement agreement is reached when a lender and a borrower agree on a lower payment than the original loan amount. Despite the fact that you are no longer accountable for the debt, it will appear as resolved on your credit report. If you have enough money, you might be able to get the tag removed if you pay off the loan in full. You can go to the lender’s branch and request that the late fee be paid. You’ll be able to see your credit report and calculate your credit score after that.
After Settling a Loan
Paying off a loan can be a big relief but it can impact your overall CIBIL score. However, it depends totally on your credit history and the credit company with which you are working. A credit mix with more secured loans may help to enhance credit scores if the portfolio is mostly unsecured.
Therefore, before engaging in any financial activity or obtaining any type of loan, it is vital to check your CIBIL score. In India, the CIBIL score represents the borrower’s financial history. A high CIBIL score indicates a high level of financial stability, and vice versa. As a result, you can make a CIBIL score login to pay close attention to your CIBIL score and report and keep a track of it on a regular basis. Moreover, you need a high credit score in order to get approval on your personal loan or a home loan application.
