The credit score, ranging between 300 and 900, is what financial institutions emphasise the most during personal loan applications. It’s a comprehensive determinant of an individual’s creditworthiness and behaviour and tells the risk he/she implies for a lender.
- As per a report, nearly 37% of consumers had scores above 765, as of May 2020 (1).
- TransUnion CIBIL, one of the most regarded CICs in India, computes an individual’s credit score based on their credit activities over the past 36 months (1).
When lending institutions extend unsecured credits like a personal loan, they have limited ways of ensuring timely and full repayment. That’s why the CIBIL score is so vital to the process. Applicants must check the credit score before applying for a personal loan to gauge chances of approval. One can do so through multiple channels, either directly from the private credit bureau’s website or from that of a lending institution.
Process to check credit score on CIC website
A majority of financial institutions in India refer to an applicant’s CIBIL score, assigned by TransUnion. The credit bureau lets individuals check their CIBIL score for free once a year and as many times as one wants with a subscription. In case you are wondering how to check CIBIL score for free, you only need to visit their website and follow the steps mentioned below –
- On the main page, you can find the option “Click here” to get your free online CIBIL score and report.
- Clicking on it will redirect you to another page, where you need to provide a few necessary information like your name, email ID, DOB, address, etc. Fill out those and click on the “Accept and Continue”.
- Validate your ID on the following page.
Your annual CIBIL report will appear after these formalities are over.
- The ideal CIBIL score for a personal loan is usually 750 or higher.
A 750+ CIBIL score is crucial for personal lending since it lets you obtain finance at competitive rates and better terms.
Process to check credit score with a lending institution
Specific lending institutions let you check your score directly from their website before applying for a personal loan. To that end, you can follow these steps –
- Search “Check credit score + name of the financial institution” and click on the relevant result
- Enter necessary details like name, DOB, address, and net monthly salary per your PAN card.
- Provide the OTP you receive in the registered email ID and mobile number.
Based on your credit score, the lender’s website might display customised loan offers for you. Specific financial institutions like Bajaj Finserv also provide pre-approved offers to its customers for a faster, hassle-free application process. These apply to a range of financial products, like a personal loan and business loan. You can check your pre-approved offer by providing your name and phone number.
Nonetheless, since your eligibility for a personal loan depends significantly on your credit score, it is wise to build a solid score before applying in the planning stage.
You can improve your CIBIL score by doing a few things, such as –
- Timely bill payments – If you use a credit card, ensure to pay your dues on time and in full every month. Besides that, ensure you do not miss out on EMI payments if you are servicing a loan.
- Read the credit report correctly – It’s paramount to check the credit report and do so routinely. Often, a low CIBIL score can be due to a discrepancy in information acquired by the agency. This habit of checking the report frequently goes a long way into ensuring your score reflects your creditworthiness most accurately.
- Continue with old credit cards – A lengthy credit history is a hefty factor in the score’s calculation. Continuing with old credit cards lets you build that history and ensure a high score.
Hence, if your CIBIL score is getting you down, follow these few tips to get back on track. Personal loans, which are expected to grow by 10% between 2020 – 2025, (2) are among the most hassle-free credits available in India today. Individuals only need to check credit score is above 750 and provide a handful of documents to secure this collateral-free credit.
