CIBIL Score for Personal Loan

Q: What type of information is included in my credit report?

Your loan repayment details, existing and past credit and your credit behaviour is recorded in your credit report.

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What is CIBIL or Credit Score for Personal Loan?

A CIBIL Score is an important factor that measures your creditworthiness. It is taken into consideration by lenders when you apply for a personal loan and other credit products. A personal loan is a type of unsecured loan that has a short or medium term period. It can be taken for several reasons such as for paying off debt, medical expenses and wedding expenses among others. When you avail of a personal loan, the lender checks your CIBIL or credit score before sanctioning the loan. Credit score is a three digit numerical figure that ranges between 300 and 900 with 300 being the lowest and 900 the highest. A high score depicts a good credit history, whereas a low score determines a low history.

Steps to check CIBIL score for Personal Loan

You can do a CIBIL score check online through the website of authorised credit rating agencies like TransUnion CIBIL. Steps to check credit score for personal loan -

Visit the website of TransUnion CIBIL
Create your account online and verify your identity
Pay the required fee and check your CIBIL score instantly. You can also view a detailed credit report along with the score

CIBIL Score Range for a Personal Loan

Range of credit score	Rating	Impact on Personal Loan Eligibility
Nil	NA	If you have never availed of any type of loan or credit card till date, you have no credit history. As such, your credit score would be nil or zero.
350 to 549	Poor	A poor credit score means that you have a bad credit history, i.e. you did not repay the loans or credit card debts on time. Most lenders reject the loan application at a poor score and you need to improve the score before applying for a loan
550 to 699	Average	Average score is also not a very favourable score. This depicts that you might have defaulted on previous loans due to which the score has reduced. You need to improve your score for getting the loan at low interest rate. Some lenders do offer loans to individuals with this score, but the interest rate might be higher in these cases
700 to 749	Good	A good score allows you to avail of the loan easily. You can get a higher amount of loan at a relatively low interest rates.
750 to 900	Excellent	This is the best credit score that you can have. You can negotiate lower interest rates and get the loan at the most favourable terms

Factors affecting Personal Loan CIBIL score & Ways to Improve it

The factors that affect your CIBIL score are as follows:

Repayment history

Repayment history means how you have repaid your past and existing loans and credit cards. If there are defaults, the score would be reduced.

Credit usage

Credit use means how much credit you have utilised against the credit limit that has been allowed to you. If your credit usage is high, your score would be reduced.

Credit mix

The credit mix means the type of credit that you have availed of, in the past and present. If you have too many unsecured loans, your credit score would be hampered.

The number of loan applications made

Making too many loan applications at the same time affects your credit score adversely. With every application, there is a hard enquiry on the score which lowers it.

Credit history

For how long you have been using credit also impacts your score. If you have a limited history, your score might not be very high. However, if you have a long history and timely repayment record, your score would be good.

There are various ways in which you can improve your credit score. These ways are as follows:

Always repay your loans and credit card bills on time
Do not make too many loan applications at the same time
Keep your credit utilisation limited
Build a long credit history
Have a healthy mix of secured and unsecured loans in your portfolio
Don’t opt for loan or credit card debt settlement

A high CIBIL score is always recommended if you are in the market for a loan. Here are 5 reasons why:

1. Easy availability

Firstly, with a high credit score you can get a loan easily. All lenders offer loans to borrowers with a high CIBIL score.

2. Quicker approvals

The loan application is processed quickly and you can get the funds at the earliest if you have a high score.

3. Better interest rates

Lenders allow interest rate negotiations so that you can get lower rates when you have a high credit score.

4. Higher loan amounts

Personal loan eligibility depends on your credit score. With a good score you become eligible for availing of higher loan amounts for your financial needs.

5. Get pre-approved offers

Pre-approved loans are allowed by lenders based on your credit score alone. You can avail of these offers when you have a high credit score.

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Reviewed on 04/11/2022

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Frequently Asked Questions

What Credit Score Is Needed for a Personal Loan?

A credit score of 700 or 750 and above is needed for a personal loan.

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What is the difference between Credit Score and CIBIL Score?

The credit score and CIBIL score are the same. The credit score is also called the CIBIL score because it is calculated by TransUnion CIBIL, a credit rating agency.

Interest rates start from 10.75% p.a., and the personal loan charges are also low. You can use the personal loan EMI calculator to make the loan affordable. Moreover, the prepayment facility helps you reduce the loan burden whenever you have additional funds.

How can I check my CIBIL score for free?

Many websites allow you to check your CIBIL score for free. You can search for these websites and then calculate your credit score for free. You can also do a CIBIL score check online through the websites of credit rating agencies.

What type of information is included in my credit report?

Your loan repayment details, existing and past credit and your credit behaviour is recorded in your credit report.

Does CIBIL Score affect my chances of getting a new personal loan?

Yes, the CIBIL score determines whether you would get a loan or not. A good score is needed to get the loan. If the score is bad, the loan application would be rejected.

How to get a personal loan with a credit score of 550?

Some lenders allow personal loans with a low credit score. You would have to find such lenders. Alternatively, you can add a co-borrower and opt for a low amount of loan if you have a credit score of 550.

How good or bad is a credit score of 600?

A credit score of 600 is considered average. You might avail of a loan at this score. However, the interest rates might be high and/or the amount might be limited.

How to get a personal loan with a low CIBIL score and bad history?

It is difficult to get a personal loan with a low CIBIL score and bad history. However, if you add a co-borrower, improve your score or look for a limited amount of money you can avail of the loan.

Will checking my CIBIL score repeatedly decrease it?

No, when you check your CIBIL score, it is called a soft enquiry. Your CIBIL score would not be affected by this enquiry.

What is the CIBIL score and how is it defined and how can I know mine?

The CIBIL score measures your creditworthiness, i.e. your ability to repay loans. You can know your score by checking it on CIBIL’s website.

How does CIBIL Score work?

The CIBIL score determines whether you can avail of a loan or not. Authorised credit rating agencies calculate the CIBIL score and the score is used by lenders before issuing you the loan.

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.

What is the minimum Credit score required for availing a personal loan?

The minimum credit score depends on the lender from whom you avail of the loan. Usually, for a personal loan credit score of 750 and above while some lenders do offer loans at a score of 650 too.

How does the credit score changes?

The credit score changes depending on your credit behaviour. If you repay your loans on time, utilise your credit wisely and maintain a good credit record, your score would improve. On the other hand, bad credit behaviour would hamper the score.

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