CIBIL Score

When you go to take any loan, the single most important thing that the loan approver checks is your Cibil score. Cibil score is a consumer’s credit score which reflects his/her credit profile. 

It is a 3-digit numeric code which is given based on your credit history such as your borrowing and repayment habits with all lenders in India. The score is updated regularly and is accessed by all lenders – be it a bank or an NBFC. The score ranges from 300 to 900 and the closer you are to 900, the better is your Cibil score. In general, a Cibil score of 750 and above is considered to be good.

In the case of home loans, Cibil score plays a very important role. It can impact your home loan eligibility, the interest rate, the approved loan amount and the repayment time period. While evaluating a home loan application, Cibil score is the first report checked by the authorities. A bad Cibil score may attract a higher interest rate, or worse, the loan can be rejected altogether. 

How can you know your Cibil score?

Obtaining your Cibil report is quite easy. All you need to do is go to https://www.cibil.com/ and click on ‘Get Your Cibil Score Now’. You can pay a nominal fee and obtain your report. 

Many banks also provide the Cibil report to their customers for free. Check with your banker to know if they provide the service. 

How can you maintain a good Cibil score?

Here are a few things you can do:

• Pay credit card debts on time and in full: On-time payment and full payment reflects good repayment habits. Avoid missing out on payments. 
   
• Avoid withdrawing cash from your credit card: People withdraw cash from a credit card mostly when they are in dire need. No one withdraws cash from a credit card when they have sufficient bank balance. Right? Lenders do not like this habit.
   
• Keep records of old credit card closure: In case you have cancelled and closed a credit card, keep the closure document safe. You never know when you might need it. 
   
• Don’t approach multiple lenders for the same loan: As we mentioned earlier, Cibil score is the first thing a lender checks when you make a loan enquiry. And every time a lender checks your Cibil score, it is reflected in your Cibil history. So, when finally, you apply for a loan and they see several Cibil enquiries against you for the same loan, they will get sceptical. Also never ever apply with two lenders for the same loan. 
   
• Check your Cibil report from time to time for anomalies: This is very important. Cibil is a system after all and it depends on the data sent by various lenders. It is possible that you might have had a loan many years ago and already repaid it. But the lender did not send the repayment information to Cibil, due to which the loan still shows as outstanding against your name. This will affect your home loan application adversely. Hence, retrieving your report from time to time, especially after a few months of repaying a large debt, is a good idea. This can easily be done by visiting the Cibil site. In case you see an anomaly, you can contact Cibil with the details. They will guide you on the next steps.

A person can take multiple loans such as multiple home loans or home loan, car loan, personal loan, credit card and others. However, it is important to know that all the loans will be reflected in Cibil history. Moreover, an increased number of loans will also bring the Cibil score down.