10 Facts About CIBIL Score that Borrowers Should Know
When a borrower is looking to generate cash using a financing service, the first thing that he needs is a good CIBIL score. Every financing institution checks this particular rating.
Without having a good CIBIL score in India, borrowers can find it difficult to generate funds. Moreover, If the amount of the loan is massive, then a complete background check is also conducted, along with a checking your credit rating.
This process is the same in the case of all financing services including personal loans. If you want to know more facts about how to improve your CIBIL score, then you must continue reading.
- CIBIL score and rank
The first thing that we are going to discuss is what is a CIBIL score and a CIBIL rank. CIBIL score is a term which is used for individual borrowers. While on the other hand, CIBIL rank is a term that denotes a company’s credit position.
- Investment or savings account
Your CIBIL rating does not depend on the amount that you have as investments or in your savings account. Irrespective of these facts, your CIBIL score can be low or high.
- The difference in CIBIL score
Sometimes borrowers can notice differences in CIBIL scores. This is because each organization has its own way to calculate the CIBIL score. It is majorly due to the different models that they implement.
- Omissions from credit reports
Any organization that generates a credit report to showcase your CIBIL score can’t delete information from the same. It is because they receive this information from other lenders and financing institutions.
- Checking CIBIL score
A borrower is allowed to check his CIBIL score online as many times as he wishes. There are no charges for this particular service, and one does not have to face any limitations as well.
- No credit history
In case a borrower does not have a credit history, it does not mean that he will be able to enjoy the benefits of a good CIBIL score. In short, no credit history has nothing to do with having a decent credit score.
- Old credit accounts
Even if you close all your old credit accounts, it will still not improve your CIBIL score. That is why it is always recommended that you do not open new credit accounts multiple times.
- Lines of credit
Many borrowers apply for multiple lines of credit now and then! This can have a negative effect on your CIBIL score and can lower it drastically. Moreover, the situation remains the same even if you repay your borrowed loan on time.
- Free credit reports
Credit reports can now be generated easily through free channels. However, this is considered a bit dangerous. It is since a borrower would have to share their personal financial information with sources that might not be secure.
- Loans with a low score
If a borrower has a low CIBIL score, they can still apply for finance. This is even more true in the case of personal loan eligibility criteria. Overall, it is an ideal fund-generating option for people with low credit ratings.
NBFCs is known for offering pre-approved offers on multiple financing services like personal loans, home loans, EMI credit, and business loans. These pre-existing online offers make your loan acquiring process less time-consuming and easy.