- Applying for a loan or credit card? Do check your credit score
- But you need to check it at other times too! Read this post to know all such times
A credit score is a measurement that indicates how much money you can borrow. The score, which varies from 300 to 900 in India, is given to people who have had credit for at least 6 months to a year. A credit score of 750 or more is regarded as excellent. On the other hand, a score of 700-750 will be considered satisfactory. A score of less than 650, on the other hand, is regarded as poor. Lenders will check their credit scores when applying for a loan or a credit card. Before applying, you should perform a quick credit check. When you check CIBIL Score on the credit bureau’s official website, you are doing a soft inquiry. This may somewhat lower the score, but only a little. If you want a loan or credit card or to settle your debt, repay your debt in full or make a balance transfer, you need to check CIBIL Score. Here are some scenarios in which you should check your credit score.
Instances When to Check Credit Score
The reason to check your credit score is if the credit score is bad and you have submitted an application before or without verifying it. The lender may reject the loan, credit card, or other application. However, a regular credit score check may be required at other times as well. The following are instances when a borrower should check CIBIL score..
When Applying for a Loan or Credit Card
Before applying for a loan or credit card, you should run a credit check. Because it assists in determining prospects of obtaining credit. If the credit score is 750 or higher, a loan or credit card application may be approved quickly. If it’s low, you’ll need to review your credit report to figure out why. Credit scores are typically low owing to non-payment of credit card bills and loan EMIs. As a result, if your credit score is low, you must raise it before applying.
While Making the Balance Transfer
Check the credit score before moving the current loan to a different lender with a reduced rate. Because you have a good credit score, you may be able to negotiate a lower interest rate. After you’ve made the transfer, double-check your credit score to see if it’s changed. A hard inquiry is placed on your credit record each time you apply for a loan. If the lender rejects the application, each hard inquiry has the potential to damage the credit score.
When the Full Payment of the Loan is Done
For, paying off a loan could be a huge relief. Do you know how it will affect your credit score, though? It all relies on your credit profile and the credit provider you’re using. If the portfolio is more unsecured, a credit mix with more secured loans may help boost credit scores.
When Debt Settlement is Done
When a lender and a borrower work out a debt settlement, they agree on a lesser payment than the original loan number. This releases you from the loan obligation, but it marks your credit report as ‘settled.’ However, if you have extra cash, you can have the tag removed if you can pay off the entire balance in the future. You can go to the lender’s branch and ask for payment of the unpaid overdue amount. After that, you will be able to view your credit report and determine your credit score.
Table for CIBIL Score Rating and its Significance
|CIBIL Score Range||Meaning|
|NA/NH (-1 to 5)||This indicates that it is either "not relevant" or "has never happened before." You will have no credit history if you have never used a credit card or taken out a loan.|
|350 – 549||This CIBIL score is regarded as being below average. It indicates that you have not made your credit card or loan EMI payments on time. With this CIBIL score, you will have a difficult time obtaining a loan or a credit card because you are at a high risk of default.|
|550 – 649||A CIBIL score in this range is considered fair. It indicates that you are having difficulty paying your bills on time. The loan's interest rate could be greater.|
|650 – 750||If you have a CIBIL score in this range, you're in a good position. Lenders will review your credit application before making you an offer. You may, however, lack the negotiating power to secure the best loan interest rate.|
|750 – 900||This is a fantastic CIBIL score. It signifies you've paid credit payments on time and have an excellent payment history. Banks will also lend you money and provide you with credit cards if they believe you have a low risk of failure.|
Check Credit Score at Wishfin?
Many credit bureaus, such as CIBIL in India, now give credit scores. CIBIL is the most well-known of India’s credit bureaus because it arguably has the largest collection of loan and credit card data of any other credit bureau in the country. Wishfin, the official partner of TransUnion CIBIL, offers a free CIBIL score check. Simply follow the instructions below to check CIBIL score on Wishfin.
- Mention credentials such as your name, email, ID, and phone number.
- Enter your PAN information.
- Accept the Terms & Conditions by selecting Gender
- Click the ‘Submit’ button.
- Following that, you can see your CIBIL score on the screen.
Good Credit Score Offer a lot of Advantages
- Lower interest rates: You are eligible for a low interest rate when your credit score is good since it gives the lender confidence in their debt management abilities.
- Attractive Credit Card Specials: If your credit score is high, lenders will offer credit cards loaded with incentives like significant cashback and points on online and offline transactions, appealing dining offers, and travel privileges.
- A Quick Approval: Loans and credit cards are authorized more quickly when the credit score is good.
- Easy Negotiation: If your credit score is good, you may be able to negotiate with your lender to extend your loan limit or lower your interest rate.
- Build a good credit history: It aids in the improvement of one’s credit record, allowing one to borrow funds if an emergency arises.