Even though credit consumption has increased significantly in India, most individuals in the country remain unaware of their credit scores. As per a survey, only around 52% of borrowers possess basic information regarding CIBIL score, and why it is essential.
- Surprisingly, 68% of respondents were not aware of their CIBIL scores.
- Around 76% were unaware of the interest cost of loans as well.
Today, opting for any form of unsecured loan would require a borrower to pass a credit score check. Most lending institutions sanction credit to only those applicants who boast CIBIL scores of more than 750. So, here’s a quick guide to help you users check their CIBIL score.
Checking CIBIL score using 5 simple steps
Potential borrowers would need to check their credit or CIBIL score before availing unsecured funds like a personal loan. Doing so will also enable them to match personal loan eligibility criteria conveniently. Although 750 is the minimum score necessary across most financial institutions, some NBFCs may seek higher scores from their loan applicants.
At any rate, individuals would need to follow the steps mentioned below to access their credit scores for free –
- Step 1: Visit CIBIL’s official website and choose ‘Get your CIBIL Score’, which is located on the top right corner of the page. The following page will include an option for an annual credit score check.
- Step 2: Next, proceed to set up your account on this portal. To do so, enter the email ID, name, username and password. You would also need to submit a proof of identification, such as PAN card, Voter ID, Aadhaar card or any other. Finally, proceed to the next option.
- Step 3: You would next receive an OTP on the provided mobile number, using which you would need to verify your identity.
- Step 4: On the next page, you will be notified of your CIBIL account enrolment. You will also receive a similar notification through your email.
- Step 5: Go to the dashboard and check your free credit score here.
However, merely knowing how to check a free CIBIL score is not enough though. A prospective borrower must also know how CIBIL score is important for personal lending.
Importance of credit score in availing personal loans
Often individuals with sufficient income and repayment capabilities fail to acquire credit. Under such a circumstance, they need to consider if their CIBIL score is getting them down and take the necessary steps accordingly.
A CIBIL score is the only way for lenders to assess an applicant’s creditworthiness. In the case of unsecured credits, the absence of collateral increases the risk for lending institutions. Thus, if a borrower is unable to repay such dues, financial institutions may end up disadvantaged due to missed or delayed repayments. Individuals with a credit score of 750 or more tend to repay dues in time, thereby being considered as ideal borrowers.
- The Indian personal loan market is expected to grow at a CAGR of 10% up to 2025.
If your CIBIL rating is lower than the required score, improving it before applying for a personal loan with an attractive interest rate on a personal loan can also help. To do so, start with ensuring that you service existing dues before your due date. Credit card users should also pay their monthly bills in full before the due date. Lastly, keeping your credit utilisation ratio below 30% should also lead to an improved credit score over time.
Eligible applicants can also take advantage of pre-approved offers from lenders like Bajaj Finserv, which ensures faster and simpler credit processing. These offers are available on a range of financial products, including personal loans, business loans, credit cards, and more. You can check your pre-approved offer by providing your contact number and name.
These loans can also be used to consolidate your other dues, ensuring easier repayments. Individuals can thus combine their debts and repay them with a personal loan. With impressive scores, one can avail attractive personal loan interest rates as well.