When you apply for a loan at any lender, the very first thing they will check is whether you are credit worthy.
So the question is how lenders check whether an individual is credit worthy or not?
They do this by getting credit information report (CIR) from Credit Information Bureau of India Limited (CIBIL) containing credit score and other details personal, employment, bank account information and enquiry details of the borrower. Based on these details, lenders then decide whether or not any individual or company is credit worthy. In most of the cases, credit score is enough for assessing any individual’s repayment ability. An individual’s credit score is the number ranging between 300 and 900. Higher the credit score, higher is the chance of getting approval for the loan or credit card. Check out how to dispute mistakes in credit report.
What is CIBIL:
It is India’s first authorized repository which has borrowing details of every person and company. Lenders such as banks or financial institutions are the members of CIBIL and they both work in conjunction i.e. when a loan is approved by any lender they provide all the details: loan/credit card taken, payments due, payments done on time or not, number of default payments etc. details to the CIBIL.
After receiving these details, CIBIL calculates and assigns a credit score which is in the range of 300-900 using statistical methods. CIBIL also collects data from various other sources. When requested, CIBIL provides credit information request of the borrower to the money lenders. Based on this report, lenders take a decision on whether to approve a loan or not, how much credit to be given, interest rate to be charged and others. Of course there are many other factors taken into consideration before approving any loan or credit card.
How can you check CIBIL credit score?
Before applying for a loan or credit card, it is worth recommended for you to check credit score beforehand from CIBIL. Based on the score, you can make a judgment on whether or not loan/credit card application would be approved or not. Of course there are many other factors banks will check before approval apart from credit score. Even if you are not applying for any kind of a loan or credit card Rs. 500 is worth spending. Because you will get credit score and based on that you will start thinking about building your score which will help you in the future when applying for any type of loan or credit card. If you are a first time credit card applicant, check out how you can get the card.
The charge to get credit score from CIBIL is Rs. 500 and you can make this payment either using credit card/debit card/net banking. In order to get your credit score online, visit CIBIL website https://www.cibil.com/online/credit-score-check.do and provide following details:
- Whether you want CIBIL transunion score
- Personal Details: Full name, date of birth, gender, ID proof & number (PAN/Driver’s licence/passport/Voter ID)
- Contact details: Address, mobile/home phone, and E-mail ID. Once these mandatory details are entered, you will receive details on your registered E-mail ID.
- Make payment: Then you need to make a payment of Rs. 500.
- Authentication: After this, authentication is required and you will have to answer 3-5 questions on existing loan or credit card details. Remember to enter these details correctly otherwise your authentication will fail. Once all the details are entered correctly, you will receive your personal credit score on your registered E-mail ID on the same day by CIBIL. You can keep all these details handy so that the process will be much faster for you.
In case authentication fails then you can re-enter details and CIBIL will send your credit score on the registered address via express delivery service.