While a personal loan is considered a competent method to deal with planned or unplanned expenses, financial institutions require a comprehensive report about the borrower’s creditworthiness before approving their loan application. Due to the unsecured nature of a personal loan, the lenders often focus upon the credit score to know about the debt handling and repayment capacity of the candidate. Assigned to each individual by any of the RBI licensed agencies, a credit score is a three-digit number that summarizes your credit history by analyzing your borrowing behavior.
While a credit score of at least 750 is required to avail of a Fullerton India instant personal loan, it is believed that the higher your credit score is, the better are your chances of getting a personal loan. In addition to it, a higher credit score also makes you eligible for receiving attractive loan offers, higher loan amounts, lower interest rates, and more extended repayment periods. However, if your credit score is low, there are various methods to improve it, such as paying off your existing loan EMIs and credit card bills. You can efficiently perform an online credit score check through the official websites of concerned agencies, namely, the TransUnion CIBIL, Equifax, Experian, and CRIF Highmark. Please also note that apart from credit score, there are various other parameters which are taken into account while determining loan eligibility. Read on to know more about checking your credit score before opting for a Fullerton India personal loan.
While four credit information agencies could assign a credit score to an Indian national, our country’s most commonly referred credit score is the CIBIL score calculated by the Credit Information Bureau of India Ltd. (CIBIL).
CIBIL Score classification
The CIBIL score can be divided into several categories based on different ranges:
- NA/ NH: It points to the fact that the individual has no credit history of being assessed, and hence, the organization has assigned no credit score.
- 350-549: Considered relatively low and inadequate, this score generally corresponds to the poor credit history such applicants generally face rejection.
- 550- 649: This score also implies there are very slim chances of getting a personal loan. One may be able to get loans of very small amounts at very high-interest rates.
- 650-749: It is an average credit score that qualifies you for a personal loan but still does not guarantee a low interest rate. However, if you apply with a guarantor or a co-applicant, it shall give you a chance to negotiate with the lender and acquire the loan on favorable terms. Alternatively, you can go for a secured loan.
- 750 or more: An excellent CIBIL score that assures your debt-repayment ability and guarantees instant loans without any hassle. A score of 750 or above also gives you the additional benefit of negotiating with the lender for low-interest rates, longer tenure, higher loan amounts, etc., to get the best deal.
Steps to check your CIBIL Score
One can quickly do an online credit score check through the official CIBIL website by following the below-given steps:
- Log on to the official CIBIL website (cibil.com/freecibilscore).
- If you are a new user, create an account by entering your name, active mobile number, email ID, and password. Subsequently, you will also be prompted to create a username and password for operating your account.
- In the next step, you shall be asked to verify the identity by entering personal information such as date of birth, address, PAN/AADHAAR number. Then, an OTP will be sent by CIBIL to the provided mobile number and email ID for verification purposes.
- Upon successful submission, you will be redirected to a new tab confirming your registration. Subsequently, you can check the CIBIL score on your dashboard along with the detailed credit report.
Once the CIBIL account is created, you can check your credit score anytime by logging in through your credentials.
Ways to Improve CIBIL Score
Various factors that can help increase your CIBIL score include:
- Paying bills and EMIS on time: Paying your credit card bills and submitting your monthly installments of existing loans in full and on time helps in boosting your credit history. You can set automated reminders to pay your bills on time.
- Avoid multiple loans: Numerous debts might affect your credit history negatively and increases the risk of facing rejections on your loan application. Hence, avoid applying for multiple credit cards or loans simultaneously to improve your CIBIL score.
- Maintain good credit utilization ratio (CUR) – Defined as the percentage of available credit limit you use to deal with your expenses, the CUR of your credit card should be limited to 30% for maintaining a healthy credit score.
- Check your credit report regularly – Make sure to periodically check your credit score and sort out any discrepancies in your credit report with the agency to preserve a good credit score.