5 Common CIBIL score queries were answered

CIBIL score is a score being generated by CRISIL Company, which is the sole market leader in the case of the maintenance of the borrower’s credit history. The credit score helps the lenders identify the right persons for extending the credit loans or credit cards to the borrowers. Every bank examines the CIBIL score of the applicant to check the mentality of the borrower in case of the credit payment of the borrower. The banks & NBFC’s are extremely cautious while extending the loans to the borrowers as the banks’ bad debts are increasing rapidly. Thus banks are very cautious about the extension of the loans to the borrowers. The banks need thus need clear credit history and no default history to extend the loans to the borrowers. The CIBIL score has become a very important tool for the bank to identify fraudulent customers and avoid extending loans to fraudulent applicants. The only limitations of the CIBIL score are that the first-time borrowers or the persons who haven’t taken any of the credits at any time in their life are the ones whose credit history is not generated. Those customers’ banks cannot identify that who amongst those are the fraudulent or willfully defaulting persons.

The individual can check their credit score on various finance portals free of cost by entering the details required to check the credit score. Usually, the aadhar card & Pan Card number are the ones which the individual has to enter along with the details like date of birth to check the CIBIL score. The CIBIL score can be checked and improved by some strategies to avail easy credit from the banks. The only care the applicant should take is that the credit card bill and the loan EMI’s should be paid on time by the borrower to avoid affected credit history. If paid on time, the credits can help the borrower avail excellent CIBIL score, making it easy to avail maximum credits without any obstacles. The importance of the CIBIL score is increasing rapidly as none of the banks approve the loans without checking the CIBIL score. Thus knowing the CIBIL score is necessary for the easy approval of the credits and avoiding mistakes that can reduce the CIBIL score.

Common CIBIL score queries

Qs1: How to improve the CIBIL score if it is too less?

Ans: There are various strategies through which the borrower can improve the CIBIL score. The borrower can repay the existing credits on time to improve the CIBIL score. Also, the borrower should maintain a sufficient bank balance in the bank account, which also impacts the CIBIL score. If repaid on time, Avail shorter credits can help the borrower improve the CIBIL score like short-term personal loans.

Qs2: What can be done if the loan application is rejected due to the poor CIBIL score?

Ans: Try improving the CIBIL score by the strategies mentioned above. Also, try with another lender for the application of the loans. Some lenders extend loans to borrowers with poor credit history but higher interest rates. So the lenders charging higher interest rates can opt for the loans if it is urgent and must necessity.

Qs3: What are the categories of ratings for the CIBIL score?

Ans: The CIBIL score is rated on the 1000 points scale. If the CIBIL score is in the range of above 800 points, then it is considered excellent. If it is in the range of 600-800, it is considered as good. And if the CIBIL score is in the range of 300-600, then it is considered average, and if it is lesser than 300 points, then it is considered poor.

Qs4: What is the acceptable range of the CIBIL score for the approval of loans?

Ans: The acceptable range of the CIBIL score for the approval of loans is either an excellent CIBIL score of more than 800 out of the 1000 points or else in the range of 600-800, which means good. Only in the case of the average or poor CIBIL score of fewer than 600 points can the loan be rejected.

Qs5: What can be done to maintain the best CIBIL score?

Ans: The following things can be done to maintain a good CIBIL score:

  • An individual should pay the credits on time is the foremost important thing for the good maintenance of the CIBIL score.
  • Also, the individual should maintain a good bank balance which puts a significant impact on the CIBIL score.
  • Avoid taking excessive credit, which can affect the CIBIL score.
  • Try taking a mix of credits like home loans, personal loans, credit cards, car loans. Etc.
  • Pre-pay the loans up to a certain extent to avail rebate on loans to improve the credit score.
  • Do not take multiple loans at a time. This can also affect the CIBIL score. Pay the existing loans and only then take another one.

Thus the maximum queries being possible to have been solved on in this article. Knowing about CIBIL score is very important for an adult person to avoid making any mistakes, leading to rejection of loans when required. Also, remember that the banks are keen on extending loans to the borrowers due to the rising competition amongst the lenders, but all the banks & NBFC’s are keen to extend loans only to the honest payers of credits. Thus maintaining a good CIBIL score is necessary and one of the important factors for approving loans & credit cards.