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Cibil Score
CIBIL, an acronym for Credit Information Bureau India Limited, is a three-digit number between 300 and 900 that denotes an individual’s creditworthiness. The higher the CIBIL score, the better an individual’s chances of having the loan reviewed and approved. On the contrary, a low CIBIL score denotes an individual's credit-risky behaviour. One can check their CIBIL score online by submitting their PAN card details on the official website of CIBIL.
Since PAN is associated with most individuals' financial and bank accounts, checking your CIBIL score for free by submitting PAN details is one of the easiest ways to check one’s credit health.
Your CIBIL score is one of the first things an NBFC or lending bank would check before evaluating your loan or credit card application. Hence, checking your CIBIL score online for free by entering your PAN number will increase your chances of getting your application approved.
What is a CIBIL Score, and What does the CIBIL Score Range Mean?
CIBIL score, synonymous with credit score, is an Indian credit rating bureau that has access to your credit information. The CIBIL score is one of the most crucial indicators of your financial health, which every lender evaluates before approving your loan or credit card application. Authorised by the Reserve Bank of India (RBI), CIBIL is a body that keeps a tab on the creditworthiness of over 600 million individuals and 32 million businesses.
According to CIBIL, a CIBIL score range equal to or above 750 is good. A good CIBIL score range will not only help you access credit but also reduce your interest on your loan application. Most banks and NBFCs offer low interest rates to individuals with a good CIBIL score range. Hence, it is always best to keep your CIBIL score range within a healthy bracket to increase your creditworthiness. Check your CIBIL with your PAN card to help lenders offer you credit.
The table below shows what each CIBIL score range denotes:
| Score Band | Category | Meaning |
|---|---|---|
| <300 | No credit history | It means an individual has never taken a loan or credit card and has no credit history. |
| 300-550 | Very low credit score | The range shows a damaged credit history, which can be improved with disciplined credit repayments. |
| 551-620 | Low credit score | It shows the poor credit history of a borrower, which needs immediate attention. |
| 621-700 | Fair credit score | A borrower is not very far from a strong credit score. Hence, individuals must work on improving their scores to get the best offers. |
| 701-749 | Good credit score | It shows an individual has been responsible and disciplined with their credit repayments. Hence, most lenders would offer low interest rates. |
| 750+ | Excellent credit score | It shows that the borrower’s credit record is very impressive. |
Key Factors That Impact Your CIBIL Score
Your CIBIL score depends on several factors. Here’s what significantly impacts your score:
- Payment History: Late or missed payments negatively affect your score, while timely repayment boosts it. Maintaining a regular repayment schedule is critical to achieving a good CIBIL score range (750 and above).
- Credit Utilization Ratio: Using your credit limit extensively can lower your score. Aim to keep your utilization below 30% for a free CIBIL score improvement.
- Credit Mix: A balanced mix of secured loans (home loans) and unsecured loans (credit cards) helps lenders view you as a reliable borrower.
- Length of Credit History: Longer credit histories positively influence your score as they provide a better understanding of your financial behavior.
- Credit Enquiries: Frequent credit score checks are advisable, but too many hard inquiries by lenders may lower your score. Use tools for a CIBIL score check free online by PAN number or check CIBIL score with PAN card to monitor your score without affecting it.
Regular monitoring of credit scores through the CIBIL bureau or the authorized platforms lets you stay aware of your financial standing. Many services let you view credit score for free and take corrective steps if needed.
What is a Credit Score?
A credit score represents your creditworthiness and ranges in a 3-digit numerical from 300 to 900. It helps lenders identify the likelihood of borrowers repaying their loans or credit card dues on time. Your credit score check is crucial for getting favourable loan terms or higher credit limits. Regularly checking your score helps you maintain good financial health.
You can view your credit score through credit bureaus or specialized platforms. Keeping a tab on the credit score allows individuals to monitor their financial status effectively.
A credit score and a CIBIL score may seem identical, but they have subtle distinctions. A CIBIL score is a credit score calculated by the Credit Information Bureau India Limited (CIBIL), one of the leading credit bureaus in India. While a credit score can come from various bureaus, the CIBIL bureau provides the most widely used score in India.
Why Should You Check Your Credit Score?
Checking your credit score is crucial for a multitude of reasons. First, it provides insight into your creditworthiness, indicating how likely you are to be approved for loans, credit cards, or mortgages. Second, a free credit score check lets you monitor your credit score to look for any errors or fraudulent activities on your credit report. Additionally, it lets you take steps to improve your credit score if necessary, such as by paying bills on time or reducing debt.
- Knowing how to check your CIBIL score gives you a deeper understanding of your financial health and how lenders would perceive you.
- Regularly doing a free check of your credit score will help you catch any errors or fraudulent activities on your credit report.
- Checking your credit score for free helps you take steps to improve it, such as paying bills on time, reducing debt, or avoiding unnecessary credit enquiries.
What are the Benefits of Maintaining A Good Credit Score?
Having a good credit score can open doors to numerous financial opportunities and advantages for an individual. Credit Information Companies (CICs) provide credit report checks to financial institutions to analyse their creditworthiness. One of the most important benefits of a good credit score is easy loan or credit card application approval. Here are the most important benefits if your CIBIL score range for a loan is in the permissible range.
- Lower Interest Rates: You are likely to qualify for credit cards and loans with lower interest rates with a good credit score.
- Higher Approval Odds: Most lenders are more likely to be inclined towards an excellent credit score, whether for a loan application, mortgage or credit card.
- Better Insurance Rates: Most insurance companies in India analyse credit scores to determine premiums. A good credit score means lower homeowners, auto and renters insurance rates.
- Improved Negotiating Power: An excellent credit score allows you to easily negotiate terms and conditions with the lender, such as higher credit limits or better loan terms.
In addition to the CIBIL score, another credit bureau in India, CRIF, also plays a significant role in assessing your creditworthiness. Similar to a CIBIL report, a CRIF report is a document that contains details about your credit history maintained by CRIF. This report includes information like:
- Personal details like your name, date of birth, and address
- Details of your credit accounts, loans and credit cards
- Your repayment history, showing whether you have paid your bills on time
- Credit inquiries made by lenders when you have applied for credit
Lenders often consider both your CIBIL score and your CRIF report when making loan or credit card decisions. Having a healthy credit history reflected in both reports will improve your chances of getting approved for credit at favorable terms.
How to Increase CIBIL Score?
Improving your score is not just fruitful for accessing better credit options but also securing your financial future. An individual’s credit score is a crucial indicator of their creditworthiness, which influences everything from loan approvals to credit card applications and lower interest rates. Below is a detailed guide to how to improve your CIBIL score and how to increase your CIBIL score from 600 to 750.
- Timely repayment of loan EMIs, credit card bills, and other bills on time demonstrates responsible financial management and contributes significantly to a higher credit score.
- Always aim to keep your credit card balances low compared to your credit limits. High credit utilisation can negatively impact your credit score; hence, paying balances can improve your credit score in the long run.
- Check your credit score regularly to detect errors or fraudulent activities in your credit history. Dispute any inaccurate credit promptly, as it can negatively impact your credit score.
- Having a diversified credit mix, such as credit cards, mortgages, and loan instalments, can positively impact your credit score. However, always ensure that you take out new credit accounts if necessary and manage them responsibly.
By following the steps on how to improve your CIBIL score quickly, you can gradually strengthen your financial standing.
Do you have a Poor CIBIL score? Apply for a Gold Loan with Muthoot Finance!
If you have a low CIBIL score, securing financial assistance can be daunting. However, Muthoot Finance has you covered, providing you with an instant gold loan with a low CIBIL score. With Muthoot Finance, you pledge your gold assets as collateral, eliminating the need for a good credit score. Muthoot Finance offers instant gold loans to you at competitive interest rates and flexible repayment options.
Unlock the potential of your gold assets and secure the financial assistance you need, even with a poor CIBIL score, with Muthoot Finance as your trusted loan partner.
- Quick loan disbursement
- Minimum loan amount of ₹1,500 with no maximum loan limit
- Easy gold loan evaluation at home
- Minimal loan documentation
- Pre and part-payment options
Why Choose Muthoot Finance to Check Your Credit Score?
Muthoot Finance is offering a free credit score check to help you stay informed about your financial health. This is credible and sourced from a leading credit bureau.
By regularly checking your credit score online, you can monitor your financial standing, understand your eligibility for loans, and work towards maintaining a good CIBIL score range—which many lenders consider crucial for approvals.
With Muthoot Finance service, you can:
- View your credit score conveniently and for free.
- Perform a credit score check online, quickly and securely.
- Proactively improve your financial profile.
This offering makes it easy for you to track and improve your creditworthiness while empowering your financial decisions. Backed by Muthoot Finance’s legacy, ensure a secure and reliable experience for monitoring your credit health.
Don’t let a poor CIBIL score hold you back.
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FAQs
For 1 gram of gold, you will be able to avail a loan amount equivalent to 75% of the market price of the metal on that particular day. Muthoot Finance offers the highest per gram rate for a gold loan.
Credit report checks are generally updated every month to reflect changes in credit accounts, inquiries, payments, and other relevant information. Regular updates in the CIBIL score ensure that the information provided in the report is accurate, allowing lenders to make informed decisions about extending credit to borrowers.
Suggested Read: How to Read CIBIL Report - A Step-by-Step Process
A number of factors affect your CIBIL score. Some of these factors include your bill payment history, credit utilisation ratio, length of credit history, recent credit enquiries, and types of credit accounts.
Yes. In India, as per CIBIL laws, individuals are allowed to check their credit scores from credit bureaus, such as CIBIL, a limited number of times within a year without incurring any charges. Beyond the permissible limit, additional requests may involve nominal fees.
A PAN card is required to check one’s credit score because it serves as a unique identifier for every individual in India. Every lender and financial bureau in India uses PAN card details to verify the identity of a person requesting their credit report. This prevents fraudulent activities and ensures credit reports are linked to the right person’s financial history.
According to CIBIL, the minimum CIBIL score range required to get a loan varies depending on the lender and the type of loan an individual is applying for. Generally, a CIBIL score above 700 is considered excellent and increases an individual’s chances of getting any type of loan and availing of lower interest rates.
A higher-than-average CIBIL score range increases the likelihood of loan and credit card approval. On the contrary, a lower credit score may result in the rejection of a loan or credit card application or result in higher interest rates or fees.
Common reasons for a low CIBIL score include late bill payments, high credit card balances, loan defaults, maxed-out credit limits, errors on credit reports and frequent credit applications.
There are multiple ways to improve your CIBIL score range for a loan or credit card application. One is to pay your bills on time and always ensure a low credit card balance compared to the card limit. Additionally, always check your credit score online to keep a tab on errors or fraudulent activities.
Credit score and CIBIL score are often used interchangeably, where both assess one’s creditworthiness. In essence, a credit score is a generic term to describe an individual’s creditworthiness. In contrast, a CIBIL score range refers to the credit score generated by India's Credit Information Bureau Limited.
Financial aspects like your bank account balance and investment portfolio have no bearing on your CIBIL score.
This can happen in two scenarios:
a). Account ownership errors wherein someone else’s accounts might be reflected as yours.
b). When such closed accounts haven’t been reported to CIBIL by your credit card provider.
In either case, it is best to reach out to CIBIL to report and correct any such wrong entries which might be negatively affecting your credit score.
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