Published on Apr 28, 2021Updated on Nov 8, 2023
If you are considering applying for any kind of loan from a financial institution in the foreseeable future, your CIBIL Score will have a lot of bearing to determine if you are a worthy applicant. As a matter of fact, approximately 90% of loan applications are sanctioned for applicants with a CIBIL score of 750 or more. Therefore, it is fair to say that the higher the CIBIL score, the greater is your chance of getting your loan application request approved.
However, before we plunge in-depth to understand how to check your CIBIL Score, let’s get the basics out of the way.
Your CIBIL score is a 3 digit number that appears on your credit report. The usual range is between 300 and 900, where 300 is the lowest and 900 is the highest. Generally, a score between 700 and 749 is considered to be good. Having said that, anything over 750 is deemed to be excellent and increases your chances of getting your loan approved. The score itself is dynamic in nature and keeps changing depending on your financial activity.
The CIBIL score is not limited to banks alone to get an understanding of you as a creditworthy applicant. Credit card companies, mortgage lenders, auto lenders, etc. also use it as a snapshot of your creditworthiness prior to approving any credit request.
The CIBIL full form can be expanded into the Credit Information Bureau (India) Limited which is the authorised credit agency by the Reserve Bank of India (RBI) that can calculate the credit score for an individual. The CIBIL meaning is basically a measurement of your creditworthiness by assigning you with a CIBIL score which is a numeric summary used by financial institutions, be it for a loan, advance or credit card application.
For any lender, the CIBIL report is an important document to look into, before approving a loan application. The CIBIL report consists of the borrower’s CIBIL score, credit history, repayment history, personal information, employment details, bank account details, contact information and hard inquiry information.
By analysing the CIBIL report, a lender determines whether the borrower is creditworthy or not and formulates the terms and conditions of the loan.
CIBIL report is generated by the company TransUnion CIBIL, a credit bureau, based on the information provided by various lending institutions from where you have taken a loan, including credit card transactions. The lending institutions provide data to TransUnion CIBIL at a regular interval of every 30-45 days.
Unquestionably, there is a process involved that helps generate your CIBIL score. Follow these steps to initiate your CIBIL score login and registration.
Alternatively, you have the option to download the form, fill in all the required details, and send it to their registered email address or postal address.
The CIBIL score is calculated taking into account the information that is listed in your credit report. These key parameters are as follows:
Your history of repayments, late payments and defaults on loans and/or credit cards is given the highest priority in your CIBIL score calculation. CIBIL collects and collates all the financial information such as bill payments, EMI compliance and other credit related details every month that is then shared with relevant financial institutions.
Your current credit utilisation ratio refers to the credit amount that has been used against your total credit limit. Restricting your credit utilisation to approximately 30% of your limit combined with the downward usage trend of your credit utilization helps boost your CIBIL score.
Whilst calculating your CIBIL score calculation, the bureau also runs a check on the type of credit that you have depended on the most. If your debt is of an unsecured nature such as credit cards and personal loans, your CIBIL score will highlight you as a risky borrower. On the other hand, home and car loans which are popular forms of secured loans help to boost your CIBIL score especially if you have made timely payments during the repayment tenure.
In addition to this, some critical factors that play a role in calculating your CIBIL score include:
Must Read: How to Improve your CIBIL Score?
Improving your CIBIL score is critical for gaining access to better credit and lower interest rates. Here are some important steps to improve your creditworthiness:
A CIBIL score is an important financial metric in India that indicates a person's creditworthiness. It is a three-digit number between 300 and 900, with a higher score indicating a better credit profile.
The importance of a high CIBIL score cannot be overstated. It has a direct impact on an individual's ability to obtain credit products such as loans and credit cards, as well as the terms and interest rates offered.
A high CIBIL score indicates responsible financial behaviour, such as on-time bill payments, low credit utilisation, and a diverse credit mix, which makes lenders more willing to lend to you. A low CIBIL score, on the other hand, can limit the accessibility of credit or result in higher interest rates, both of which can be financially burdensome.
Monitoring and maintaining a healthy CIBIL score requires responsible financial habits. A good credit score not only makes credit more accessible, but it also opens the door to better financial opportunities and lower borrowing costs.
The CIBIL score is important because it is a key indicator of an individual's creditworthiness in India. Here are some of the main reasons why it is so important:
Lenders, including banks and financial institutions, use CIBIL scores to assess applicants' creditworthiness. A higher credit score indicates lower credit risk, making loans and credit cards easier to obtain.
A high CIBIL score often translates into lower loan and credit card interest rates. Borrowers with high credit scores are considered less risky, so lenders offer better terms.
People with high CIBIL scores typically have higher credit limits on their credit cards, giving them more financial flexibility.
A high credit score allows borrowers to negotiate better loan terms.
A credit history is a comprehensive record of an individual's or a company's financial transactions, including information about borrowing and repayment activities. It includes information about loans, credit cards, and other credit-related transactions, exhibiting whether payments were made on time or if there were any defaults or discrepancies. A positive credit history reflects responsible financial behaviour, whereas a negative one may cause potential lenders to be concerned.
A credit report is a CIBIL document that summarises an individual's or business's credit history. Credit scores, which are numerical representations of creditworthiness, are included. Lenders use these reports and scores to determine the risk of extending credit. A higher credit score usually results in better loan terms, whereas a lower score may result in a higher interest rate or loan rejections.
Here are some important steps to improve your CIBIL score:
Make sure that all credit payments, including loans and credit card bills, are made on time. Late payments can have a significant negative impact on your credit score.
Try to keep your credit card balances low in comparison to your credit limit. High credit utilisation indicates financial stress, which can lower your credit score.
Examine your credit report for any errors or inconsistencies. Report any errors to the credit bureau so that they can be corrected.
Applying for multiple credit accounts in a short period of time can lower your credit score. Only apply for credit when absolutely necessary.
Make a budget, prioritise debt repayment, and avoid overspending.
Here are the key reasons why having a high CIBIL score is important:
Your CIBIL score is used as a primary factor by lenders to determine your creditworthiness. A high score indicates responsible financial behaviour, which increases the chances of loan approval.
A good CIBIL score frequently results in lower loan interest rates. Borrowers with higher credit scores are viewed as less risky by lenders, who offer them better terms and save them money over the life of the loan.
A high CIBIL score increases your chances of obtaining larger loan amounts, allowing you to meet significant financial needs such as purchasing a home or funding education.
A high CIBIL score can speed up the loan application process, cutting down on the time it takes for approval and disbursement.
A good credit score gives you the negotiating power to negotiate better terms with lenders, potentially saving you thousands of rupees over the life of the loan.
Here's how you can check your CIBIL score is:
CIBIL reports, like other credit bureau reports, are typically updated monthly. This frequency ensures that the information in the report is current and reflective of your most recent financial activities. The updates cover a wide range of financial aspects, such as credit card usage, loan repayments, new credit inquiries, and any outstanding debts.
The frequency of updates varies slightly between credit bureaus, but it is generally a monthly process. Your credit score is typically refreshed every 30 to 45 days in the case of CIBIL. This regular updating enables lenders and individuals to make informed decisions about credit applications and financial transactions based on the most recent data.
A low credit score can be caused by various factors, including:
Missing payment due dates on loans or credit cards on a regular basis can significantly lower your credit score.
Having a high balance relative to your credit limit can lower your score because it indicates financial strain.
Using a large percentage of your available credit can signal to lenders that you are engaging in high-risk behaviour.
A short credit history can result in a lower score because there is less data to evaluate your creditworthiness.
Serious negative events, such as bankruptcy or foreclosure, can have long-term consequences for your credit score.
Having multiple credit inquiries in a short period of time can lower your score, as it may indicate a desperate need of credit.
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Your CIBIL score, also known as your credit score, is a numerical representation of your creditworthiness that is influenced by a number of factors. These are as follows:
On-time payment of credit card bills, loan EMIs, and other obligations improves your credit score. Late or missed payments can significantly reduce it.
Your credit score is affected by the percentage of your credit limit that you use. High credit card balances in relation to the limit can harm your credit score.
A longer credit history is more likely to be viewed favourably. It provides an in-depth analysis of your financial behaviour.
Applying for multiple credit accounts in a short period of time can lower your credit score because it indicates increased credit risk.
High levels of outstanding debt can negatively impact your score, particularly if it strains your ability to meet financial obligations.
Your CIBIL score is a significant part of your getting a personal loan. There are other factors that also play a key role in the approval of your loan application.
Before you apply for the personal loan online, make sure that you have your CIBIL score handy. A high CIBIL score, for example, 750 or more, makes you an ideal candidate for any type of loan. With a medium to a good score, your personal loan will have a good chance of getting sanctioned.
On the other hand, a 550 or less CIBIL score for a personal loan may lead to the cancellation of your loan application as you may be considered a ‘high-risk’ candidate. Even if you are offered a personal loan, the interest rates offered may be higher than usual.
Follow these steps on how to apply for a personal loan online at SMFG India Credit.
Start the process by using a personal loan eligibility checker on the SMFG India Credit website to get an assessment of what you need and if you can avail of the same at all. To avail of a personal loan, make sure you satisfy the following eligibility criteria:
Log on to the SMFG India Credit website on http://www.smfgindiacredit.com/ to submit all the necessary personal and financial information on the application form. Click on the ‘Submit’ button.
An email notification will be sent to your registered email address instantly. Get your paperwork in order and upload soft copies of the same online. Here is a readymade list for your easy reference:
Upon submission of the application form and the documents, SMFG India Credit takes some time to verify the information. Meeting all eligibility criteria and a good to high CIBIL score will be the key parameters that will help in SMFG India Credit’s decision-making process for your personal loan application.
If SMFG India Credit has sanctioned your personal loan, you will receive a 'Sanction Letter’ on your registered email address. Subsequently, a loan agreement will be shared that outlines essential information such as the loan amount, interest rates, tenure of repayment, fees, charges, penalties and general terms and conditions of the personal loan.
The personal loan agreement must be signed and emailed back to SMFG India Credit. This helps to put in motion the disbursal formalities. Generally, it takes around 24 business hours* post receipt of the signed agreement for the loan funds to hit the applicant’s bank account.
You must make it a habit to check your CIBIL score periodically. This is to give you an idea of how your profile is being perceived by prospective lenders. Monitoring your CIBIL score regularly helps you to build your credit profile.
Having said that, SMFG India Credit eligibility criteria requires personal loan applicants to have at least a 750 CIBIL score at the time of making their loan application. However, if you still have questions, feel free to reach out to our friendly customer service department on the toll free number 1800 103 6001 or email us at [email protected].
Opting for a credit card can affect your CIBIL score depending on your existing credit portfolio. If you already have a diverse mix of credit types, adding a credit card may not decrease your score. However, if credit cards are your primary form of credit, each new card application can have a negative impact.
CIBIL keeps records of defaulters for 7 years. This means that a person's financial history, including any defaults, remains in CIBIL's database for 7 years, helping lenders assess creditworthiness.
Yes, your CIBIL score can change over time. It typically takes 4-12 months to see noticeable improvements. Scores above 750 are recommended. If your score is below 600, it may take some time to raise it to 750.
A Credit Information Report (CIR) contains an individual's credit payment history across various loan types and institutions over time. The CIBIL Score is a three-digit summary derived from the CIR, representing creditworthiness. CIR does not include details of savings, investments, or fixed deposits.
Your CIBIL score is not public but can be accessed by potential lenders, current lenders, insurance companies, and prospective employers to assess your creditworthiness.
To check your CIBIL Report, visit the official CIBIL website, provide required details, and complete the verification process to access your credit score.
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CIBIL Score 2.0 is an updated scoring model that introduces a risk index for first-time borrowers, allowing lenders to evaluate creditworthiness more accurately, even for individuals with limited credit history.
It typically takes 4-12 months to raise your CIBIL score, depending on your individual financial situation and credit management.
A CIBIL score of zero means that the borrower's credit history is available for less than 6 months. It indicates limited or no credit history, which can make it challenging to assess creditworthiness for lenders.
*Terms and conditions apply
**Subject to foreclosure charges. Terms and conditions applicable.
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*Terms and Conditions apply. Loans are disbursed at the discretion of SMFG India Credit.