CIBIL 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.
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 -
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 |
The factors that affect your CIBIL score are as follows:
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 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.
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.
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.
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:
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.
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.
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.
The credit score range determines whether you would be able to avail of a loan or not and if you do, it also determines the loan terms and personal loan interest rate.
Your credit report is reviewed regularly depending on your credit behaviour. However, once your credit report is created, it cannot be deleted. It can, however, change depending on your credit behaviour.
You can improve your credit score by repaying your loans on time, using your credit wisely, not making too many loan applications and also maintaining a good credit mix in your portfolio.
View All
Kotak Mahindra Bank offered me an affordable personal loan by checking my credit score instantly.
Reviewed on 04/11/2022
The credit score check by Kotak Mahindra Bank was done quickly and I got a loan at the best interest rates
Reviewed on 04/11/2022
Kotak Mahindra Bank has very attractive loan offers and offers the loan quickly after doing a thorough credit check.
Reviewed on 04/11/2022
You can pay off any existing balance of Home Loan using Kotak’s Home Loan Balance Transfer at a lower rate of interest.
If you are an NRI and are looking for a Home Loan, Kotak provides you just that. Check out our NRI Home Loans section.
If you are looking for renovating your home, you can do so by taking Kotak’s Home Improvement Loans
A credit score of 700 or 750 and above is needed for a personal loan.
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.
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.
Your loan repayment details, existing and past credit and your credit behaviour is recorded in your credit report.
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.
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.
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.
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.
No, when you check your CIBIL score, it is called a soft enquiry. Your CIBIL score would not be affected by this enquiry.
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.
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.
Select your preferred method.
Chat with us
Our messaging assistant can quickly solve many issues or direct you to the right person or place.
Email us
Be it an enquiry, feedback or simple suggestion email us and we'll get back to you.