Personal loans are an effective way to access funds without the need for any collateral. Some of the best personal loans in India give borrowers access to a high-value sanction, completely online and within a matter of minutes. However, this ease of access is dependent on your eligibility, of which one of the main factors is the credit score. Most lenders in India require you to have a minimum CIBIL score of usually 650. Applicants who meet this mark have a much easier time qualifying for these loans.
For greater insight into this crucial aspect of a borrower’s financial profile, read on.
What is your CIBIL score?
Your CIBIL score is a three-digit credit score assigned by TransUnion CIBIL Limited, based on data within the Credit Information Report or CIR. It is a score based on the Accounts and Enquiries details within your CIR and it is used by lenders to assess your creditworthiness. Since this credit score is based on your credit history, lenders can estimate the probability of default and accordingly decide on loan eligibility and applicable loan terms.
What is the CIBIL score range and how is it relevant to borrowers?
A CIBIL score can range anywhere between 300 and 900. This is important because it is the first thing lenders assess when they check your loan application. Depending on the type of loan, a CIBIL score higher than 700 and under 750 is considered a fair score and may get you through the door. Anything lower than 700 is a poor score and is likely to lead to loan rejection. On the other hand, a CIBIL score of 750 or higher is considered a good score and it makes qualifying for a loan much easier. 90% of loans granted today tend to be to those applicants who have a CIBIL score of 750 or higher.
What are the factors that determine a CIBIL score?
The CIBIL score is calculated based on 4 key factors, which are:
- Credit mix: Having a balance between secured and unsecured debt is known to have a positive impact on the credit score.
- Payment history: A credit history that reflects late payments or defaults is likely to lower your credit score.
- Credit utilisation: Those who utilise a high percentage of their assigned credit limit indicate a rising dependency on credit, and this can negatively affect the credit score.
- Frequency of loan enquiries: An applicant with multiple credit enquiries in a short period comes across as a credit-hungry borrower, which is a red flag for lenders, and every credit application reduces the credit score.
How can borrowers build a healthy credit score?
Here are a few tips that can reliably build a healthy credit score.
- Use credit in moderation
- Avoid defaulting on payments
- Conduct a credit history review every few months
- Try to maintain a balanced credit mix
- Wait at least 6 months before applying for new loans
How can borrowers check their CIBIL score?
There are multiple online facilities that allow you to check your CIBIL score online. Depending on where you are checking your score, you can even avail of this provision for free. Here are the steps to check your CIBIL score on the Bajaj Finserv website:
- Start by clicking on ‘Get Your CIBIL Score’
- Enter a few basic details including your name and PAN
- Submit details and verify your profile with an OTP
- Check the credit score and access the credit report.
This facility is quick, easy to follow, and grants eligible applicants easy access to their credit score. You can also download your Credit Health Report by paying a nominal fee and get access to your detailed credit profile and learn about tips that can help you improve your credit score.
That’s not all, depending on your credit profile, you may also qualify for a pre-approved Bajaj Finserv Personal Loan. Get quick approval on loans of up to Rs.25 lakh and use the funds to meet any expense. You can choose to repay the loan comfortably over a flexible tenor that ranges up to 60 months.
Further, Bajaj Finserv offers complete loan disbursal within 24 hours of approval, and features like this help it rank high among the best personal loans available in the country. This expedited service makes it a reliable solution, even in an emergency. The offering also has a personal loan calculator to allow you to plan loan repayment effectively and in advance. To access this instrument in a hassle-free manner, check your pre-approved offer by sharing basic personal information.
Disclaimer: This content is distributed by Bajaj Finserv. No TNIE Group journalist is involved in the creation of this content.