Importance of a CIBIL™ credit score in getting loans in India - CreditMantri (2024)

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Importance of a CIBIL™ credit score in getting loans in India - CreditMantri? ›

CIBIL™ scores range between 300 to 900. A higher score is considered to have better chances of easily getting loans or other forms of credit. One of the key reasons why lenders look into a credit report before granting a loan is to check the credit score of the applicant.

CIBIL Score helps the borrower to know his credit status. A person who manages his finances well will always have a higher CIBIL Score. A lower CIBIL Score signifies that the applicant has low creditworthiness and banks refrain from giving loans to such applicants.

A CIBIL score of 750 or above in your credit report is ideal. It will aid in qualifying you for personal loans and credit cards. However, if your CIBIL score is below 685, you will find it harder to borrow funds from banks and NBFCs.

Ideal credit score to avail a personal loan

The minimum CIBIL score for a personal loan is between 720 and 750. Having this score means you are creditworthy, and lenders will approve your personal loan application quickly.

Companies use credit scores to make decisions on whether to offer you a mortgage, credit card, auto loan, and other credit products, as well as for tenant screening and insurance. They are also used to determine the interest rate and credit limit you receive.

CIBIL uses its proprietary algorithm for this calculation. But the most important components of this calculation is how you have treated credit such as loans and credit card bills in the past. The CIBIL score is important as this allows banks to only offer loans and credit cards to people with a good credit history.

The minimum CIBIL score for a loan is usually between 600 to 750. If you are availing a secured loan, i.e., where you have to provide collateral, the eligibility criteria is not as strict.

A credit score of 666 is considered excellent and is indicative of a responsible borrower who manages credit and debt well. If you have a credit score of 666 or higher, you are likely to have access to a wide range of financial products and services, including personal loans with favorable terms and conditions.

Yes, a 650 credit score is typically considered fair and you can qualify for loans, but the terms and interest rates may not be as favourable for you compared to those with higher scores. Lenders may have varying criteria, so shopping around and comparing offers is essential to find the best option.

CIBIL scores range between 300 and 900. The closer the score is to 900, the better it is considered. While a score between 300 and 549 is deemed to be poor, anything from 550 to 700 is deemed to be fair.

What is the minimum CIBIL score for HDFC personal loan? ›

HDFC Bank prefers the applicants to have a credit score of 750 and above to be eligible for the personal loans of the bank. The very minimum CIBIL™ score required by the applicants to be considered for HDFC Bank personal loans is 700.

What is the minimum CIBIL score to get a personal loan? Usually, you can get a personal loan with a CIBIL score of 650 or 700 and above.

The most common credit scores feature a scale of 300 to 900 in India. On that scale, a credit score between 660 to 724 is generally considered “good.”

A perfect credit score of 850 is hard to get, but an excellent credit score is more achievable. If you want to get the best credit cards, mortgages and competitive loan rates — which can save you money over time — excellent credit can help you qualify.

Financial institutions look at your credit report and credit score to decide if they will lend you money. They also use them to determine how much interest they will charge you to borrow money.

The CIBIL stands for the Credit Information Bureau (India) Limited. It is a three-digit numerical value of an individual's creditworthiness, primarily based on their credit history. It is one of the most important scores to consider when evaluating a borrower's credit application. CIBIL Score ranges between 300 to 900.

CIBIL creates your credit report

Your repayment and borrowing history, ongoing loans, credit card dues, etc., are all compiled by CIBIL and presented in your CIBIL report. It also contains your employment history and loan enquiry information.

Ans. No lender specifies a minimum CIBIL score requirement for a personal loan application. However, a score of 750 and above is preferred by lenders for loan applications. This score reflects the creditworthiness of the borrower and the chances of lenders approving the loan application with this score increases.

Taking a personal loan may initially affect your credit score negatively. But, if prompt payment of the loan is made in a timely fashion, then the credit score becomes healthy again. Charting out a repayment scheme that helps customers repay the loan promptly takes precedence for good banks.