What is the minimum CIBIL score required to get a loan?

Typically, a CIBIL score of at least 650 (or higher) is required to be approved for a loan. Lenders may accept applications that are 650, but your chances of being approved for a loan improve significantly if your score is greater than 750. A higher score also means better terms when approved, such as lower interest rates and being allowed to borrow a larger amount of money. Apply with a high CIBIL score for the easiest chance of approval for loans.

Does the minimum CIBIL score vary by loan type?

Yes, the minimum CIBIL scores differ across loan types. Home loans usually have a minimum requirement above 725 , while those with a 650 score may be approved for personal loans depending upon the lender. Each of the loans is a separately rated loan - they are going to have a different level of risk, which is why higher scores help their approval. Just make sure to check on the lending requirements of lenders for each loan type.

How can I increase my CIBIL score quickly?

To improve your CIBIL score fast, pay all your bills on time, reduce your credit card balances, and avoid taking on more debt. Check your credit report for errors and correct them. Try not to apply for too much new credit. These steps can help increase your score quickly and improve your credit profile.

Will my credit score drop if I check it?

No, your CIBIL score will not drop when you check it. Checking your own score is a soft inquiry , which doesn’t impact your score. However, if a lender checks your score as part of a loan application, it counts as a hard inquiry , which may slightly lower your score. So, checking your score won’t harm it.

Why is a PAN card required to check the CIBIL score?

PAN card represents your unique identity and is needed to measure your CIBIL score. The CIBIL score is linked to your PAN number, ensuring accurate credit reporting. It’s part of the process to prevent fraud and maintain security while accessing your credit information. Without a valid PAN card, you cannot check your CIBIL score officially.

Can anyone check my CIBIL score?

No, you can only check your CIBIL score for free once a year. Others, like banks or lenders, can check your score if you give them permission when applying for a loan or credit card. This allows them to assess your creditworthiness. You should regularly monitor your score to stay informed of your financial health.

Why does my CIBIL score keep changing?

Your CIBIL score can change due to various factors, like late payments or changes in your credit usage. If you open new credit accounts or make late payments, your score may drop. On the other hand, paying bills on time and lowering credit card balances can improve your score. Check your credit report regularly to track changes and make necessary adjustments.

What is a CIBIL Score? - Advantages, Calculate and Why Its Important

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Benefit	Impact
Loan Approval	Easier access to loans
Interest Rates	Lower rates on loans
Credit Limits	Higher limits
Financial Flexibility	More options available

Your CIBIL score focuses on your credit habits, but it does not consider:

Income: The amount you earn is not considered in your score.
Savings: Your savings accounts or investment balances do not affect your score.
Employment Status: Whether you are employed or self-employed is not taken into account.
Education: Your level of education has no impact on your score.
Lifestyle: How you spend your money or your lifestyle choices are not part of the calculation.

The CIBIL score only considers your credit history and how well you manage borrowed money. Factors like income or lifestyle are not relevant to this score.

Income

Your CIBIL score does not take your income into account. It is based purely on how well you handle credit. Whether you earn a high or low salary, the score does not change. A high income may help you manage your bills, but it’s your credit usage and payment history that affect your score. So, no matter how much you earn, paying your bills on time and using credit wisely is what matters most to your CIBIL score.

Savings

Your CIBIL score doesn’t consider how much money you save. It only looks at how you use and repay borrowed money. Having a large amount of savings does not improve your score, but managing your credit well does. It’s more important to manage credit card payments and loan repayments than to have a large savings balance. The key is using credit responsibly to maintain a good CIBIL score.

Employment Status

Your CIBIL score doesn’t factor in whether you are employed, self-employed, or unemployed. It is based on how you manage credit, not your employment status. Even if you are unemployed but manage your credit responsibly, your score can remain high. On the other hand, if you are employed but fail to repay your loans on time, your score could suffer. The CIBIL score is concerned only with credit-related activities, not your job.

Education

Your CIBIL score does not consider your education level. Whether you are a graduate or have a PhD, it has no impact on your score. The score is purely about how you handle credit—whether you repay loans and credit card bills on time, and how much of your credit limit you use. While a good education might help you get a better job, it does not influence your CIBIL score.

Lifestyle

Your CIBIL score does not consider your lifestyle. It doesn’t matter if you spend lavishly or live frugally. The only thing that affects your score is how you manage credit. Whether you are a big spender or a saver, if you use your credit wisely and pay your bills on time, your score will improve. Lifestyle choices like your spending habits do not directly affect your CIBIL score.

If you want to have access to more money and better loans and credit cards, improving your CIBIL score will enable you to negotiate the terms. Having a better score means lower rates of interest and more financial opportunities. Here are some simple ways to raise your score in this space:

Pay your bills on time: Late payments will reflect poorly on your score.
Reduce your credit utilization: Using less from your overall approved limit helps.
Resolve any mistakes on your credit report: Mistakes can hurt your score.
Limit the number of credit applications: Too many credit applications will be detrimental to your score.
Keep old credit cards open: Having credit history for as long as possible will help.
Mixing types of creditors: Having a mixture of loans and credit cards is most beneficial.
Get expert help: Don't be afraid to ask for help.

By using the tips above, you will not only improve your CIBIL score but find better opportunities.

Pay on Time

Paying your bills and loans on time is the biggest factor in raising your CIBIL score. Paying late or missing payments can leave you a lot worse off. The longer you wait, the more it affects your credit history. Use alerts, reminders, or consider automatic payments, so you will never have to miss a due date. Consistently making your payments on time will illustrate good financial habits that will take you far in improving your CIBIL score over time. The best way to show that you can responsibly manage credit is through timely payments.

Lower Credit Usage

Using a high percentage of your available credit can negatively affect your CIBIL score. It’s recommended to keep your credit utilization ratio below 30%. This means if you have a credit limit of ₹1,00,000, try to use less than ₹30,000 at any time. High credit usage indicates that you are financially stretched, and this could lower your score. To improve your CIBIL score, aim to pay down your credit card balances regularly. The less of your available credit you use, the better your CIBIL score will be.

Fix Report Errors

Mistakes on your credit report can cause a bad CIBIL score. It’s essential to check your credit report at least yearly for any mistakes, such as the wrong personal details, any missed payments you actually made, or even fraud. Bring any mistakes to the credit bureau and dispute them right away to have a chance of increasing your CIBIL score! You should try to check your credit report at least once a year to make sure all your information is accurate.

Limit Credit Applications

Too many credit applications in a short period can harm your CIBIL score. Each time you apply for credit, a hard inquiry is made, which is noted in your credit report. Multiple hard inquiries can make you appear credit-hungry, reducing your CIBIL score. To improve your score, only apply for credit when necessary. If you need to borrow money, it’s better to check your eligibility first before formally applying. Limiting the number of credit applications will help you maintain a positive CIBIL score.

Keep Old Cards

One of the best ways to improve your CIBIL score is to keep older credit cards open. The length of your credit history is a key factor in your score, and older accounts improve that length. Don’t close old accounts, even if you no longer use them. Keeping them open shows that you’ve managed credit for a long time, which can positively impact your CIBIL score. However, make sure to use the cards occasionally to keep them active. A longer credit history can significantly boost your CIBIL score.

Mix Credit Types

Variety in credit types can be useful for improving your CIBIL score. Having credit cards and loans shows lenders you can handle multiple types of credit, both revolving (credit cards) and installment (personal loans). If your credit history only has one type of credit, it could result in a lower CIBIL score. Make sure to have a balance of types and manage them properly. A better balance of credit types can demonstrate to lenders that you are capable of managing different types of credit, which may increase your score.

Get Expert Help

If you feel you are at a loss for how to work on your CIBIL score, you could look into getting professional help. A financial advisor or credit repair service can help you think through practical changes to improve your score. The benefit of getting their help is that, once they have analyzed your report, they can provide you with advice to address those problem areas and actionable steps to improve your score. Just remember to vet them and only choose a qualified and reputable professional. You can also receive other recommendations on how to reduce debt, strategies when dealing with disputes and how to maintain a healthy credit score in the future. Professional help can make the improvement process more manageable and achievable.