Every one of us will occasionally require financial support. The financial leverage needed to address various financial issues is extended via a loan. Online CIBIL score checks keep you vigilant because they give you all the details you need to prevent payback delays. According to a TransUnion CIBIL poll, millennials’ awareness of credit scores has increased by 58% over the past few years.
CIBIL score is one of the most vital aspects for the lenders as it represents your creditworthiness. It allows lenders to understand your credit history, any default repayments, and other important factors which directly impact the credit. As a borrower, it is important for you to keep your CIBIL score as high as possible as it helps you in getting the desired loan amount with a lower interest rate.
Follow the below steps for a free CIBIL score check online:
- Step 1: Visit the CIBIL website
- Step 2: Fill in your personal details, you will get an OTP on your personal number
- Step 3: Enter the OTP and go to the dashboard
- Step 4: You will receive your credit score
6 Reasons why lenders check your CIBIL score before approving loan.
- Loan Eligibility
If you are applying for unsecured loans, your credit score is vital for lenders as it testimonial of your creditworthiness. Lenders have access to your credit report, and they can see your credit history. Hence, your credit score will tell you whether you are eligible for a loan or not. Before applying for a loan, you can do an online CIBIL score check to ensure that you have a higher credit score. Once you meet the required criteria, you will get your loan approval.
| CIBIL Score | Creditworthiness | Loan Eligibility |
| 750 and 900 | Excellent | Very High |
| 700 and 749 | Good | High |
| 650 and 699 | Average | Possible |
| 550 and 649 | Poor | Difficult |
| 550 and below | Bad | Low |
- Credit History
Credit history is like your google search history – it shows your entire credit history from the first day till the present day. As an ideal borrower, it is your responsibility to keep a good credit history which is resultant of regular repayment of loans and credit. While applying for a loan, lenders check your credit history which represents your ability to the repayment of the loan. A good credit history helps lenders to provide a higher loan amount with a low-interest rate. - Loan Approval
With low or poor credit scores, lenders hesitate for the final approval of the loan. In some instances, there is a high probability that you might not get loan approval. On the other hand, a person with a higher CIBIL score will get quick loan approval with less paperwork. - Debt Obligation
If you are a guarantor and the borrower fails to pay the loan on time, it will have an impact on your CIBIL score. On failure of repayment, you will be held responsible to pay the loan. Before becoming a guarantor, you should be aware of the credit history and financial situation of the borrower. If there are such instances, lenders will check if you have any current debt obligations as it will directly impact your ability to repay any additional loan. - Rate of interest
Factors such as rate of interest, loan amount, and tenure are the three most important factors that are directly influenced by your CIBIL score. Your online CIBIL score check will help you and your lenders to know the CIBIL score. At the time of applying for an unsecured loan, the CIBIL score acts as security for your loan amount. You will have a better chance of getting a high loan amount with less rate of interest in case you have an excellent CIBIL score. In case you have a low or poor CIBIL score, there are chances of loan rejection or a loan with a high rate of interest. If you are someone who is unaware of your CIBIL score, you can do an online CIBIL score check. A higher rate of interest not only impacts the current finances but also influences all your upcoming financial planning. - Special Offers
Lenders appreciate borrowers and existing customers who have higher CIBIL scores. Having a higher CIBIL score helps both borrowers and lenders to meet their respective ends without any hassle. From a lender’s point of view, they can offer a higher loan which directly helps in pushing their profits. Also, they feel assured that payment will be made on time. This encourages them to offer various special offers for those customers such as pre-approved loans, lifetime credit cards, attractive credit card offers, special gifts, and other such attractive offers. These special offers motivate the borrowers to keep their CIBIL score higher as they are aware of the numerous benefits they can receive.
To conclude
Whether you are applying for credit or not, it is important that you have good financial habits. The majority of people struggle with their finances at various stages of their lives. Opting for a loan or credit assists you in tackling various financial struggles. We at Credit Success are here to help you with any financial assistance. We understand your financial requirement and assist with our wide range of products. While opting for a loan, you must always do your online CIBIL score check to get clarity on your CIBIL status. Knowing your CIBIL score will ensure that you get your desired loan amount.
