All About CIBIL 2.0 – What’s New

Highlights

  • Now getting approved for any kind of credit becomes easier for new borrowers
  • CIBIL 2.0 also includes the Risk Index of a user having less than 6 months of credit journey

You must have heard about CIBIL score, your credit health indicator. But, have you heard about CIBIL 2.0? Its an updated version of Transunion CIBIL score which is gradually being adopted by the banks after considering the changing consumer profile and credit data.

What’s new in the CIBIL 2.0?

Earlier users who had negligible or no credit activity in the last 24 months were rated as NA or NH signifying the lack of enough credit activity. To simplify things Transunion CIBIL has come up with CIBIL 2.0. Now, customers who have less than 6 months of credit history will be rated on a scale of 1-5 with 1 signifying “high risk” and 5 signifying “low risk”.

If you are in the habit of seeing a higher CIBIL score, there’s an update –

  • The credit score in CIBIL 2.0 will be lower than your CIBIL score
  • You will also get the Risk Index in your updated report. The RI ranges from 1 to 5 with means the following things –

Risk IndexInterpretation
1-2High Risk
3Moderate Risk
4-5Low Risk

Can Individuals Assigned NA or NH Status Get a Loan or Credit Card?

Yes, it’s possible. Maybe, it would be a secured loan offer based on securities such as fixed deposit, national savings certificate (NSC), etc. The quantum of finance would depend on the value of the security submitted. You can get a loan of up to 80%-90% of the value of the security. Most likely, the rate of interest can be lower compared to unsecured loans.

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Credit cards can be offered to those having salary accounts with the lender, with the credit limit to be decided on the basis of the remuneration an individual earns. By virtue of these offers, individuals under NA or NH category can build credit history over time.

What Credit Hygiene Should Borrowers with 1-5 Index Maintain?

People falling in this index, as said above, have a credit history of less than 6 months. Within the period, those having displayed good credit behaviour by paying dues on time would be accorded an index of 5 or closer to it. A delay or default in such a period can perceive it to be too risky and thus result in lowering the index.

Those having an index of 4 or 5 must keep up the good work of paying dues on time. This would further brighten their future credit prospects. Individuals being accorded an index of 3 or less must get their repayment in order, if not the case. They must keep the spends under control to be able to make loan or credit card payment on or before the due date. A long patch of timely payment would help build a strong credit history.

The lower index could also be a result of debt servicing track being very short, say a month or two. In such a case, one need not worry. Instead, they must ensure a timely payment of the debt and create the possibility for a continuous lift in the index.

What Does 300-900 Credit Score Range Indicate?

Once the repayment track goes past 6 months and the credit history is being reported to CIBIL in the last 24 months, the score of 300-900 would be applicable in CIBIL 2.0. More the score, lesser will be the risk and vice-versa. The meaning of a good credit score could differ in CIBIL 2.0 compared to the earlier version. A credit score of 750 and above was considered good in the earlier version. Even on a credit score of 700-750, credit applications were getting accepted by the lender subject to applicants meeting the overall eligibility criteria.

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However, with the credit score possibly getting lower with CIBIL 2.0, it remains interesting to see how banks and other financial institutions view the score generated through the latest version.

Personal Loan Interest Rates December 2018
Bajaj Finserv10.99% - 16.00%
Fullerton India14.00% - 33.00%
HDFC Bank11.25% - 21.50%
ICICI Bank10.99% - 18.40%
IndusInd Bank10.99% - 16.00%
Kotak Bank10.99% - 20.99%
RBL13.00% - 18.00%
Standard Chartered Bank12.00% - 17.00%
Tata Capital10.99% - 18.00%
Home Loan Interest Rates December 2018
State Bank of India/SBI8.75% - 9.35%
HDFC8.80% - 9.70%
Bank of Baroda8.65% - 9.65%
LIC Housing8.85% - 9.05%
PNB Housing Finance9.00% - 13.00%
ICICI Bank9.10% - 9.35%
Axis Bank8.85% - 9.10%
Citibank9.00% - 9.85%
Indiabulls Housing Finance Limited8.80% - 11.05%
Kotak Bank8.90% - 8.75%
DHFL9.05% - 9.95%
Reliance Home Finance8.75% - 14.00%