How to Check Credit Score in India – A Full Guide

Getting Credit Report in India.
Getting Credit Report in India.

Introduction: Hello friends are you worried about your credit score and would like to know more about it? Here is the information on How to Check Credit Score in India. Many of us will be familiar with concepts like lending and borrowing. In your lifetime, you will have to come across a minimum of one person who will frequently forget to repay the money they borrow. This will make you think at least twice to lend money to that person because of their ignorance or forgetful nature. In the same way, financial institutions which lend funds will be issuing loans and credit card to the people who they find to be creditworthy. You must know about How to Check Credit Score in India for getting loans or credit card approval. What are we waiting for? let us jump into How to Check Credit Score in India.

A guide to how to check credit score in India

CIBIL score check is one of the important metrics which will be used by the financial institutions in India for the measurement of creditworthiness of an individual.

CIBIL Score

CIBIL score is one of the most significant factors which will be checked by all the banks or financial providers when they are receiving any credit application from people. TransUnion CIBIL is affiliated to all the banks for measuring the creditworthiness of all the enterprises and also of the individuals. CIBIL score which is high is an indication of not only your financial discipline but also, it shows your integrity. Usually, any score which is more than 700 is taken as excellent, but few of the banks will consider keeping their bar high and few do not give much importance to lowering their standards and hence they accept low credit scores too.

Computation of CIBIL score

TransUnion CIBIL is a credit information company which has been incepted in the year 2000 and this is considered to be the first of its kind in a country like India. This firm will handle the computation of CIBIL score of individuals depending on the information of the consumer which has been stored in their repository. This is a company which is well-known for its accuracy and transparency for the calculation of credit score.

Process to check CIBIL score

Below is the procedure for checking CIBIL score

  • You will be required to visit the TransUnion CIBIL official website.
  • Under the tab “Personal”, you will have to click on the “Get yours now” button which will be present on the home page to get your CIBIL score for free. You will also be able to get a complete report when you are clicking on “Get your CIBIL score” after the payment of a few charges which are applicable.
  • Consider that you have chosen to get CIBIL score for free. Now you will be redirected to a page which asks to enter your personal information for signing up in the first step. Then you will be required to verify your identity to sign up by providing a government-issued identity proof. You can check CIBIL score by PAN card
  • If you are already having an account, then you can consider signing in to your account by using your CIBIL score login
  • Your credit score will be sent to your email ID which you have entered at the time of sign up.

How to get a credit report in India

It is a simple process to get your recent CIBIL Credit score directly from the TransUnion CIBIL official website

  • Every person is allowed to have a check on their CIBIL score once in a year for free. If you have already checked it up for once, then you will be required to choose either of the paid plans mentioned below
    • 550/- for a one-month subscription.
    • 800/- for a six-month subscription.
    • 1,200/- for one-year subscription.
  • Then, you will be required to provide your personal details which are being requested in the online form.
  • Now, you have to enter the captcha which is shown in the box and then make sure that you are checking the box beside that as an acceptance to terms and conditions and then proceed to the payment page.
  • After the payment is done and the account is authenticated, you will get the credit report to your mailbox within 24 hours.

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Factors affecting credit score

How to Check Credit Score in India.
How to Check Credit Score in India.
History of repayment

Banks or any NFBCs will take into consideration your credit history as an indication of your future repayments of loan or credit card payments. Each time to take a loan or a credit, it is the lender’s responsibility to report it to CIBIL. The bank will take a note of whether you are repaying the debt on time. If you are making an effort to repay the money before the timeline, then it is considered to be a positive sign. This is an indication that you are a trust-worthy person about repayment of the amount you owed.

Sudden and huge increase in credit

As you are earning person, you may have a particular credit limit. Anyways, using the credit completely is an indication that you are credit hungry and banks will take this as red flags. If you are maintaining a specific credit level every month, but suddenly, you are seen spending more amounts, then it may lead to a decrease in score.

Debt to income ratio

Usually, lenders will not encourage people to take more debts, consider around 40% of their income. So, Debt to Income Ratio is used to observe or measure the ability of applicant in terms of repayment depending on their income. It is a fantastic metric to judge the financial behaviour as well as to make sure that you will be able to repay your EMIs in future without any hassle.

More number of existing loans

If you have many numbers of loans on your name, then it will really make the lenders concerned. The loans can be anything like a vehicle loan, home loan, personal loan and credit cards adding to them. It is always suggested to close one before you take the next. You should be focussing on closing the loans which are smaller at the earliest.

Significance of credit score

A CIBIL score is just like a scorecard to judge the integrity of your financial behaviour. It is an indication which helps the lender to make a decision on providing you with the loan or not. Below are the reasons why it is required to keep the credit score high.

Approval of a secured loan

People always think that it is simple to get secured finances like home loans and auto loans as you will be giving the lender some security in place of the funds. Anyways, your credit history will still be checked by the lender. This is how they will make a decision on the upper limit and the rate of interest. With a bad CIBIL credit score, the complete process will get complicated.

Secured loans get approved quickly

If you get a clean chit from CIBIL about your credit score, then it will have very much importance when you are applying for loans without keeping any security. Just like personal loans, for example. If you are a borrower with a high CIBIL score ( say it is more than 750), it is very easy to have it sanctioned. If your CIBIL score is more than 800, then you might even receive a higher amount than usually provided by the bank.

You may be interested in Prepaid Credit Card Benefits.

More power of bargaining on rates of interest

Here we would like to keep you informed about the fact that rates of interest change as per the loans at different banks. A higher CIBIL score will enable you to bargain with banks for a better deal or rate. You can compare the offers in an easy manner from lenders and in an authoritative manner, you can consider negotiating them as creditworthy customers are assets for any bank or financial provider.

Less premium for insurance

Insurance is one more instrument for finance which will run based on credibility and trust, whether it is medical insurance, life cover etc. Your history of repayment, history of claims and handling of debts will be tracked in a careful manner by the insurance companies. This will help them to determine if you will be able to enjoy a lesser premium when compared to other policyholders who have a less credit score.

Chance to choose the best credit card

When you use credit cards in a small manner, they will provide you with a lot of benefits. Though these credit cards provide you with a zero-interest period, the rates of interest will increase drastically when you are missing any bill payment. With an average credit score, credit card companies will compete with each other and come to you with very good deals. Else, you will end up with a card which has the maximum interest rate or you will be required to face rejection.

Good credit score and bad credit score in India

850 to 900

This credit score is an indication that you have never missed the payment and this is considered to be an excellent score.

750 to 850

You will have to believe the fact that almost 79% of loans which are sanctions are for the individuals who have more than 750 credit score. The score which is above 800 is considered to be high and you will be eligible to ask for an interest rate which is lower on personal loans and credit cards.

700 to 750

This is a good credit score to get secured loans. Anyways, for unsecured loans or credit, the bank will go ahead and conduct further investigation or they will avail you the credit with higher rates of interest.

500 to 700

This credit score is an indication that you have defaulted the payment or delayed it some times in the past. Personal loans will be somewhat tough to get from a bank. A private financial may provide the loan to you with a huge rate of interest.

300 to 500

This is a very poor score and it is also an indication of too many defaults in the past repayments of the loan. It will be impossible to avail a loan from any of the banks present in the country unless you work on repairing the credit score.

That’s all folks abour How to Check Credit Score in India, Information on CIBIL score.

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