CIBIL Score and CIBIL Report
CIBIL Score is an important component of your credit profile that gives potential lenders a quick idea of your credit worthiness. Credit rating for individuals is nothing but your credit score. In addition to a credits core, bureaus also provide a credit report which indicates your credit and payment behaviour.
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What is CIBIL Score?
Credit Information Bureau (India) Limited, commonly known as CIBIL, is India’s first Credit Information Company or Credit Bureau. It maintains records of all credit-related activity of individuals and companies including loans and credit cards. The records are submitted to CIBIL by registered member banks and other financial institutions on a periodic (usually monthly) basis. Based on this data, CIBIL issues a Credit Information Report or CIR (commonly referred to as a credit report) and a credit score.
what is the Importance of CIBIL Score ?
what is the Importance of CIBIL Score ? CIBIL score is calculated based on your credit behavior as reflected in the ‘Accounts’ and ‘Enquiries’ section of your CIR. CIBIL scores are important when it comes to availing loan approvals. Banks will check your CIBIL Score before approving your loan. A CIBIL score helps determine your credit worthiness which in turn will help you avail loans faster and easier.
CIBIL score/report plays a very crucial role in your financial journey. Credit lenders rely on your cibil score/report to determine if you are worthy of availing credit. If your CIBIL score is below average the lenders will be hesitant to advance loans and credit cards.
What Includes in this package?
- Applying for Credit Rating
- Preparing Credit Information Report
- Checking of Loan availability
- Getting CIBIL Score Report
Where CIBIL Score can be used ?
Loan approval
Your CIBIL score shows the lender just how creditworthy you are. If you have a good CIBIL score or report, the lender won’t hesitate before granting a loan. But a bad CIBIL score might lead to loan rejection as the lender is unsure of your creditworthiness.
Credit card approval
Low or a bad CIBIL score can hamper your chances of getting a credit card. If you’ve defaulted previously on any of your credit cards, it would have been recorded on your CIBIL report and this does not hold well with the banks and financial institutions. Banks/financial institutions are more likely to approve your application for a credit card when you have a decent CIBIL score.
Interest rates
Higher the CIBIL score, lower the interest rates. If you hold a good CIBIL score/report you have a better chance at getting lower rate of interest on your loans and credit cards. A good CIBIL score will grant you the power to negotiate.
Housing
A good CIBIL score will ensure that you get a housing loan without any hassles whatsoever and the same things holds true for availing a place on rent.
Approval for higher limits
Banks and financial institutions are favorable to individuals with a good or high CIBIL score. This will ensure that you get approval for higher limits from the bank or financial institutions.