Applying For a Loan: Here’s how to Check CIBIL Score?

When you apply for a loan, the lender collects financial information about you. They will study your income, expenses, savings, and investments. They also keep a check on your credit history.

Your credit history gives information about your borrowing habits. Credit information companies make this job easy for the financial institutions. They provide concise and up-to-date credit information on individuals.

What is Credit History?

Your credit history keeps a track of the money you borrow and repay through formal channels. It would be hard to get information about your debts within family or among friends.

When you borrow through banks or other credit providers, they keep a formal record of the amount. They also keep track of when you borrow it, the repayment schedule, and your repayments.

What is CIBIL?

Credit Information Bureau (India) Limited (CIBIL) is India’s first credit information agency. It was established in 2000. CIBIL operates under license from RBI. Credit agencies like CIBIL are governed by the Credit Information Companies Regulations Act.

How does CIBIL Assess your Creditworthiness?

CIBIL gets information on individual borrowings, credit card purchases, and repayments. It also keeps track on whether they were on schedule, defaulted on loans, or card dues. They get the information from banks and other financial institutions through credit facilities.

CIBIL score calculation takes into account various factors. It considers the loans you have taken and the credit card purchases you have made. It checks if you have been prompt in clearing credit card dues. It also checks whether you let it accumulate and pay it off with fines and interest.

It checks whether you've been on time with your EMI payments on loans. It notes any missed payments, bounced cheques or bounced ECS payments due to lack of funds. If you have defaulted on loans, this is a huge mark against you.

If you have taken many loans at once, have a lot of credit cards or have maxed them out, these are all marks against you. All these or portray a person as credit hungry and borrows beyond means. Any lender would hesitate to extend credit facilities to such a person.

All these factors matter when CIBIL calculates your credit score. This score is a quick check on your creditworthiness. It also prepares a Credit Information Report giving details of your credit history. Lenders have access to this report and the credit score. This comes in handy when examining someone’s loan application. It is also helpful when assessing their track record in loan repayments.

You can also check CIBIL score online. The score and the CIR (Credit Information Report) are accessible through email.

How to check CIBIL score

• Go to CIBIL Website

• Request your credit report and fill in the online application form

• Provide personal details like your name, address, income details, phone number, and email ID

• You will also have to provide ID proof, address proof, and other relevant documents

• You will have to make a payment to purchase credit health report

• CIBIL will then verify the information. Once authenticated, you will get your credit score  within 24 hours. You will also get the Credit information Report (CIR) by Email

Can you Check CIBIL Score for free?

Usually, you have to pay to access your credit report. Besides CIBIL, there are other credit information companies in India like Experian, Equifax, and CRIF High Mark. They charge a fee for providing a credit report. There are certain third party websites like paisabazzar.com providing access to free credit reports. freescoreindia.com is another such service providers.

There is good news for those who want to access credit reports from these credit rating agencies. The RBI has now made it mandatory for credit information companies to allow one free credit report per individual every year. So, once in a year, when you need it most, you can ask for and get your CIBIL credit report for free, from 2017 onwards.

It is advisable to check your credit report periodically. If your credit score is bad, then take corrective measures. If you improve your credit score, you can get loans at favourable terms like lower interest rates. You can also get some fee waivers.