How to Check CIBIL Score For Personal Loan?

Jan 29, 2020CIBIL

Life can be uncertain and during certain situations, you may require funds quickly. During such times, a personal loan ends up being your best choice. However, it is important to have a healthy CIBIL score to apply for a personal loan. Alternatively, one should at least try to maintain a minimum CIBIL score for a personal loan.

What is CIBIL score?

Firstly, let us understand the meaning of CIBIL. CIBIL stands for Credit Information Bureau (India) Limited. It is one of the leading rating agencies in India and therefore the credit score assigned by it is considered important by lenders.

Your CIBIL score to apply for a personal loan would determine various aspects of your personal loan such as the personal loan amount you are eligible for as well as the personal loan rate of interest charged. For instance, if all things remaining the same, assume that person A is eligible to receive a higher amount as personal loan along with an attractive rate of interest as compared to person B. In such a case, person B can check his CIBIL score. It is likely that person B would have a lower CIBIL score as compared to person A.

There is also a minimum CIBIL score for personal loans. If your score is lower than the minimum CIBIL score, then the terms of the loan might be quite stringent or the loan application itself would be rejected. The CIBIL score for personal loans indicates your creditworthiness to the lender. It measures your ability to pay off a loan regularly and in full. It is important for lenders to maintain a low ratio of bad loans. The CIBIL score also highlights whether the loan applicant is a possible credit risk to the lender.

Must Read: How to Calculate Personal Loan EMI

Before granting a personal loan, lenders will check the CIBIL score. Lenders publish monthly reports to check the CIBIL scores of various individuals and businesses. This makes it possible for lenders to not only select the relevant customers but also track their repayment pattern

CIBIL Scores for Personal Loans:

Let us check out what happens across different ranges of CIBIL score:

CIBIL Score Range

What does this mean for a loan applicant?

A CIBIL score for a personal loan between 750 – 900

If you have a CIBIL score between 750 and 900, then the lender would perceive you to have high creditworthiness. This would indicate that you are a person who is willing to repay loans regularly and on time. Such a healthy credit score range enables you to easily obtain personal loans and even negotiate better loan terms with the lender.

A CIBIL score for a personal loan between 650 – 749

This is considered to be a good score. You may be able to get a personal loan with such a score, but may get it at a higher interest rate or you may not be able to negotiate very favorable terms.

A CIBIL score for a personal loan between 550 – 649

This is considered to be an average credit score. Generally, for such cases, you would be required to improve the credit score. However, it depends on many other factors, including the lender’s policy.

A CIBIL score for a personal loan between 300 – 549

In such a case, it would be quite difficult you receive a personal loan. If you need a personal loan with a bad CIBIL score, then lenders would consider several factors such as job stability, income, tax filings, bank balance, etc.

But does this mean that those who require a personal loan with a bad CIBIL score would always find it difficult?

Thankfully, one’s credit score is not set in stone. It can be improved over a period of time by taking definite and constructive steps. An individual with a low credit score can work towards reaching the minimum CIBIL score for a personal loan by completing some of the following steps:

  1. Firstly, the loan applicant must check for mistakes in the credit report. If the credit score is low because old information or some other mistake, the same can be rectified quickly and in order to improve the credit score.
  2. Maintaining old credit cards and paying the bills in full and on time will enable the applicant to display a robust credit history.
  3. Customizing credit cards which will make it possible for the application to maintain a low credit utilization ratio
  4. Taking loans with longer tenure and improving credit score will reduce the EMI burden on the loan applicant and would reduce the chances of defaulting on a monthly EMI.

It is important to remember that avoiding credit isn’t the solution. Rather one can aim to use credit maturely and build a good credit score over time. In fact, never using credit can lower one’s credit score.

Must Read: How to Get a Personal Loan

However, before improving one’s credit score, it is important to know how to check the CIBIL score for personal loans.

How to Check your CIBIL Score

According to the RBI’s mandate, credit rating agencies have to provide each individual’s credit history online. Applicants can receive one credit score rating for free per year. Knowing how to check one’s credit score and being aware of it are among the most important aspects of responsible financial management.

Here is how an applicant can check the CIBIL score for a personal loan:

  • Step 1 - Visit the CIBIL website by typing cibil.com/freecibilscore in the address bar
  • Step 2 - If you are a first time user, you would be required to create an account by entering: name, email ID and mobile number. You would also need to create a user name and password. The user name and password must be stored in a secure manner.
  • Step 3 - Enter personal details which include the date of birth, address and PAN/AADHAR number for identity proof. Ensure that all details are entered correctly.
  • Step 4 - You will have to verify your identity by using the OTP sent by CIBIL to your email id or mobile number. Some more details may also be required to complete verification.
  • Step 5 - Certain details may get auto-populated in your account. You will have to verify the same. You will also need to enter details of your credit card or loan amounts as well as accounts that may not be auto-populated.
  • Step 6 - Now you will need to click submit and access your CIBIL score on the dashboard.

It is highly recommended that an individual keeps checking the CIBIL score once a month on a specified date. This will ensure that at least the minimum CIBIL score for a personal loan is maintained.

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