Find your credit score

Do you know your credit score as per Credit Information Bureau (India) Limited (CIBIL)? If not, find out immediately and if yes, use it to your advantage. When you apply for a product, a ‘credit check’ is done. It’s an attempt to predict your future behaviour based on what you’ve done in the past. In a nutshell, your credit score can determine if a loan application you make will be approved or turned down.

CIBIL implications on you

Banks, especially public sector banks, consider the credit score of an individual before sanctioning loans. Regardless of either you need a large or small loan, review your CIBIL Transunion score and Credit Information Report before filing your loan application with the lender. This could acquire you a fast and simple loan processing. In accordance with CIBIL reports, a Transunion score is a 3-digit numeric brief of your credit history which symbolizes your financial and credit strength. Your score is emerged from credit history which ranges from 300 to 900 points as specified in the Credit Information report. This score is calculated based on your history with financial institutions such as banks and credit card companies. The CIBIL CIR is given to you conjointly with your score considering that the grounds on which your credit score is developed. The lender undergoes your credit report and score to determine your repayment capacity. If you score higher, your success rate of getting your loan application approval could be better.

Low your interest outflow with good score

If you have been diligently paying your credit card dues and other loan EMIs, you will have a good credit score as per the information collected and displayed by CIBIL. However, if you have settled your outstanding credit card dues by making partial payment, it will reflect in your credit score. This can affect your chances of getting a loan, as many banks consider your credit score as per CIBIL together with other factors such as your age, income, occupation, prior relationship (if any) with the bank, etc. before sanctioning the loan.

Here’s a table to give you an idea of percentage of new loans sanctioned to people with different credit scores:

Credit score	Percentage of new loans sanctioned
<650	4.7%
650-699	5.2%
700-749	9.7%
750-599	22.8%
>=800	57.6%
source: cibil.com

Hence, if you are looking for a loan, be it a home loan, personal loan or car loan, you must know your CIBIL rating. Armed with a good score, you can get a better deal by negotiating the interest rate on the loan or get other related charges waived off. You can lower your interest rate which goes a long way in reducing your EMIs.

A good score allows you to avail a wide spectrum of credit from various lenders. It also means that you will be able to easily secure a new credit card or get a loan at more favourable terms because of the choice of lenders. On the other hand, if you don’t have a good score then you will have to make do with either no borrowing or borrowing at a very high cost.

Source-secondary