A good credit score can bring the lenders to your doorstep

Is it mandatory for individual lenders to have CIBIL subscription before applying loan?

-SV Sarma, Hyderabad

The importance of your CIBIL score must not be ignored or neglected, as the score is one of the most important financial metrics in our lives. Are you considering taking a loan to buy a car, plot or build your dream house? When it comes to buying a flat or plot, or car, the most commonly exercised option is to take a loan. Be it a personal loan or mortgage loan. Banks, financiers, other lenders and almost everyone in the financial system can seek and access your CIBIL report. To put it simply, its CIBIL score is very crucial. First and foremost, the lenders will check your CIBIL score to verify your ability to repay the loan before giving a loan. Knowing your CIBIL Score is the first step for any personal loan application to ensure that they qualify. Banks, financial institutions and private lenders evaluate borrowers based on their credit and repayment history. Taking a loan will be a cakewalk for borrowers with a good credit score since credit history and score help speed up the entire approval process. In other words, the higher your CIBIL score, the greater your chances of getting approved for a loan.

Your loan interest amount is decided based on various factors, including your CIBIL score, loan amount and loan tenure. Generally, having a good to excellent CIBIL Score will help you secure the lowest possible interest rate. You may even check out CIBIL Marketplace, which is an online platform that provides tailor-made loan offers based on your CIBIL score and report.

CIBIL is a leading credit rating agency in India that reflects your creditworthiness. In 2017, The Reserve Bank of India mandated that all credit information companies provide one free credit score and report every year. One can always check credit scores online.

The CIBIL credit score is 3-digit, mostly between 300 and 900. The CIBIL score should be above 700. The higher your score, the brighter your chances of getting a loan for a lucrative interest rate.

A score below 300 is considered poor. The banks and lenders will always want to lend or approve a loan to solvent and disciplined borrowers. It will negatively affect your chances of getting a loan. A score closer to 900 is considered Good. You must check and review your credit report quarterly or at regular intervals. Sometimes the CIBIL score may contain mistakes or blunders, which may adversely affect your CIBIL score. The review of the CIBIL score helps you identify how your borrowing and repayment behaviour is affecting your credit score. Defaulting on a loan could lead to a decline in your credit score. However, one can continually improve one's credit score by avoiding defaults. Hence, it is most important to keep tabs on your CIBIL score as you work to improve your score. A good credit score can bring the lenders to your doorstep, while a poor CIBIL score can make your life difficult, and you may end up paying a higher rate of interest.

Here is how to get your CIBIL report once a year.

TransUnion CIBIL Limited is a credit information company operating in India.

Step 1: Log in to the CIBIL website with your login credentials. Suppose you have already registered with CIBIL.

Step 2: If you are not registered, then fill out the provided form that requires your necessary information, such as name, contact number, and email address

Step 3: Fill out the additional details, including your Pan number. Make sure to enter your Pan details correctly to proceed to the next step.

Step 4: Answer all the questions correctly about your loans and credit cards, based on which your CIBIL score will be calculated and your completed credit report generated.

Step 5: You will be suggested various paid subscriptions; go for it if you require more than one report in a year.

Step 6: Your account is created. Log in to your account to proceed further and authenticate yourself. You will receive an email on your registered account. Click on the link and enter the one–time password provided in the email. Change your password and log in again.

Step 7: Once you log in, all your details will be auto-populated by default

Step 8: Once you submit that form, go to the dashboard to check your CIBIL score.

(The author is a SEBI licensed Research Analyst. The alumnus of the Indian Institute of Foreign Trade (IIFT), he had held leadership roles at National Geographic, Reliance Radio Television Luxembourg, STAR TV, etc)