Since personal loans are unsecured loans, lenders look for other ways to reduce the risk of the borrower defaulting. One metric that almost all lenders track very closely is the borrower’s CIBIL score. It gives them a clear bird’s-eye view of the level of risk involved in lending money to the borrower. In this article, we will show you how to check your CIBIL score before you apply for a personal loan. It is very important that you do this, because a good CIBIL score can help you get a personal loan at reasonable terms.
What is CIBIL Score?
The CIBIL score is a 3-digit number between 300 and 900. It is the predominant metric that is used to assess your creditworthiness. The CIBIL score neatly summarises your credit rating and credit history.
In India, there are four credit rating agencies (or bureaus) that have been authorised by the Reserve Bank of India (RBI) to issue credit ratings. These are the following:
- Credit Information Bureau (India) Limited (CIBIL)
- CRIF Highmark
A common misconception is that the CIBIL score and credit score are the same. CIBIL Score is the credit rating issued specifically by CIBIL. While any of the 4 bureaus mentioned above can issue credit scores, and all of them are equally valid, the CIBIL score is by far the most popular one that is tracked throughout India. For the purpose of this article, we will be using the terms ‘CIBIL Score’ and ‘Credit Score’ interchangeably.
What is a Good CIBIL Score?
|550 and below
Why is CIBIL Score Important
CIBIL score is important due to the following reasons
Your CIBIL score reflects your creditworthiness, which indicates how likely you are to repay your loans or credit obligations. A higher score suggests a good credit history, making you more trustworthy to lenders.
Loan or Credit Approval
Lenders often consider the CIBIL score as a crucial factor when evaluating loan or credit applications. A higher score increases the chances of loan approval as it gives lenders confidence in your ability to repay the borrowed amount.
Attractive Interest Rates
You may be able to get loans or credit with a low-interest rate if you have a high CIBIL score. Since borrowers with better scores are seen as less risky, lenders are more likely to give them lower rates of interest.
Higher Credit Card Limit
A higher CIBIL score may result in a higher credit card limit. Credit card issuers are more likely to provide increased credit limits to individuals with good credit scores as they demonstrate responsible credit behaviour.
How To Check CIBIL Score For LoanTap personal loan
To check your CIBIL Score for LoanTap personal loan, follow the below steps.
- Visit the official website of LoanTap or download the app from the App Store or Play Store.
- Sign up or log in to your account using the credentials
- Navigate to the product section and click on ‘Check CIBIL score’
- Enter the required information, which will prompt your CIBIL score to appear on the screen.
Checking your CIBIL score before applying for a personal loan is a crucial step towards a successful loan application process. It allows you to assess your creditworthiness, understand your eligibility and negotiate favourable loan terms. By checking the CIBIL score regularly, you can gain valuable insights into your credit history and take proactive measures to improve your score if needed. Being aware of your CIBIL score empowers you to make an informed financial decision and increases your chances of obtaining a personal loan that meets your needs.