Have you ever wondered which is that first thing the lenders usually do when you apply for a loan? Well, the moment you apply for a loan, your loan application reaches to the lenders, and soon after receiving the same, the lenders check cibil score. That’s Right! You read that absolutely correct! Before offering the credit to the borrowers, the first thing that lenders do is to check the score of the applicants.
Now you must be wondering why so? Why is it important to check the same? So, let me tell you my friend, the process of checking the same plays a pivotal role in the overall loan journey of an applicant. But before we move on to the topic, let’s just tell you what CIBIL Score is all about.
A CIBIL Score is a creditworthiness of an applicant, displays the credit history across different lenders over a significant period of time. Every individual has a credit history, those who have applied for a loan/credit or those who don’t. I know now you must be wondering how’s that possible? Well, there are certain agencies worldwide that collect and maintain the data of the individuals.
In India, Credit Information Company (CIBIL) does the same and maintains the record of not only the individuals but non-individuals (commercial entities) as well related to transactions such as loans and credit cards. However, there are other credit rating agencies as well such as Equifax and Experian, known for issuing the credit score in India.
This data further reaches to the banks and other financial institutions , who keep a record of the same on a monthly basis, submitting the same to the Credit Bureau. With the help of using this data, a Credit Information Report (CIR) and Credit Score is developed.
This score is further evaluated and approved by the lenders on the basis of past record after receiving your loan application. Basically, a score is a three-digit numeric summary, showing the credit history of the applicants. However, maintaining a score of 700-750 out of 900 is considered as good as far as availing a loan/credit is concerned.
So before providing a loan to an applicant, it is important for a lender to know the creditworthiness, i.e. to check his/her past record. Based on the performance, the lenders then decide whether to give a loan or not. If your report shows, you have a bad score, i.e. below 700 or 650, it would be difficult for you to get the loan so easily.
In that case, it is difficult for a lender to believe on you when it comes to loan repayment. That’s Right! One of the prime reasons that can harm your score is actually the default in the loan. If you are not regular in your payments and had a default in the past, it is going to be hard for you to get the credit. Yes, because the same will reflect in your report and your score gets calculated on the basis of past data.
Thus, it is important for an applicant to maintain a good score by timely paying all the dues. However, it is also advisable for the borrowers to check their score before applying for a loan/credit so as avoid the loan application rejection. But try to avoid regular checks as it will further lower your score. And, when it comes to knowing your score, now you can easily check the same online.
Yes, with some reliable sites available online, it becomes easier for you to check your score and that too free with the help of a PAN Card. Follow the steps below to know the process of the same…
- Log in to the official website, offering you the facility to check cibil score free
- Enter your name, date of birth and gender as per PAN Card along with PAN Number
- Submit your contact details including your current residential address, email ID and mobile number
- Agree to the terms and conditions
- Click on the Submit button
In a nutshell, it is so easy and quick to check your score online these days. And, the credit of the same goes to these trustworthy and reliable sites, where you find this facility.
Hope you find this article worth reading!