Experian, Equifax, CRIF Highmark and TransUnion CIBIL are the four credit rating agencies that the Reserve Bank of India recognizes and all lenders across the length of the country work with these credit information agencies to gauge a borrower’s creditworthiness and repayment capacity and decide on their loan application. All credit information agencies assign credit scores to borrowers based on the information collected, such as the applicant’s repayment history, the age of their credit history, the credit mix they have and their dependency on credit. The credit score is a three digit-number varying between 300 and 900. Some credit information agencies assign credit scores between 300 and 850. So, what is CIBIL Score? TransUnion CIBIL is the most popular credit information agency in India and the credit score it assigns to borrowers is known as the CIBIL score. 

The Importance of CIBIL score for home loans cannot be undermined. A borrower’s CIBIL score helps a lender understand many crucial things about the potential borrower. For instance, by looking at one’s CIBIL score, lenders can get a decent idea of whether the borrower has defaulted on loan payments in the past and what is the likelihood of them defaulting on a loan in the future again. The CIBIL score also gives lenders an idea of how long a borrower has used credit and how healthy is their credit mix. It also tells them how often they apply for credit and how dependent they are on it. In conclusion, the CIBIL score helps lenders assess a borrower’s creditworthiness as well as their intent of paying their loan on time. It also gives lenders an idea of the risk involved for them in lending money to a borrower. 

Potential borrowers are advised to check their CIBIL score before initiating the home loan process. In this article, we will bust some CIBIL score myths, but first let us look at ways to check CIBIL score. 

Ways to Check Your CIBIL Score 

Checking one’s CIBIL score is quite easy. There are two ways to do so.

1. How to Check Your CIBIL Score Using Your PAN Card Details 

These days, there are many apps and websites that potential loan applicants can use to check their CIBIL score. These apps and websites usually require borrowers to enter a few personal details, such as their name, email address, etc. They also ask a borrower to enter their PAN Card details as the PAN card details help these apps and websites fetch the right credit profile and show the right credit score. Users need not worry about privacy or security breach as details entered on these websites are never shared with anyone. 

2. How to Check Your CIBIL Score on TransUnion CIBIL’s website 

Borrowers can easily check their CIBIL score for free. However, the problem with these websites is that they only show a borrower’s credit score and do not give a borrower any idea of what factors maybe causing their credit score to go down, in case their credit score is not as good as it should be. Borrowers who want to understand the credit score they have been assigned and the factors that have helped credit information agencies determine this credit score must get access to their credit report and the only way to do so is to go to TransUnion CIBIL’s website. 

Borrowers who want to access their credit report and credit score can follow these steps to do so: 

1. Login in to TransUnion CIBIL’s official website and select the ‘Get Your CIBIL Score’ option. You will find this option on the right corner of the website. 

2. After you have selected this option, TransUnion CIBIL will ask you to choose a plan. Select the plan based on how often you want your CIBIL score and report to be sent to you. 

3. After you have selected the plan, enter information, such as your date of birth, phone number, email address, etc. 

4. Next, TransUnion CIBIL will ask you to create a password. After you have done this, select your PAN Card as ID type and enter your PAN details. 

5. Verify your identity. Go to the ‘Make Payment’ option.

6. Next, sign into your account using the OTP provided on your phone number. Enter all the required information and submit the form. 

7. During the next step, you will be shown your credit score on the screen. If you have chosen to have your credit report be sent to you on your email, CIBIL will do so. 

Checking one’s CIBIL score is quite simple. If you are planning to apply for a loan of any type, secured or unsecured, you must check your CIBIL score first and move ahead with the loan application only if your CIBIL score is at least 750. 

Let us now bust some CIBIL score myths. 

CIBIL Score Myths Busted 

Here are some popular CIBIL score myths that are only myths. 

1. Many borrowers think that checking their CIBIL score again and again will cause it to go down. This is not the case. Credit score enquiries are of two types: hard enquiries and soft enquiries. When lenders enquire about a borrower’s CIBIL score, the enquiry gets registered as a hard enquiry. Too many hard enquiries impact a borrower’s CIBIL score negatively. However, when a borrower checks their CIBIL score, the enquiry gets registered as a soft enquiry and soft enquiries have no impact on a person’s CIBIL score. Thus, borrowers can check their CIBIL score however many times as they like without worrying about it affecting their score or their likeliness of getting approved for a loan. 

2. Many borrowers also think that they if they have a good credit score, their lender will approve their loan application even if they do not meet their lender’s other eligibility requirements. While CIBIL score is important, it is not the only determinant in case of home loans or loans of other type. You must meet all the eligibility requirements to be eligible for a loan. 

3. Some borrowers think that after they have repaid a loan successfully, they must close the loan account as doing so would improve their CIBIL score. This is entirely wrong. Borrowers must never close old loan accounts as these accounts help build a borrower’s credit age, which has a direct impact on a borrower’s CIBIL score. 

Final Words 

The CIBIL is important and there is no denying that. Therefore, borrowers must proceed with their loan application only if their CIBIL score is at least 750. If their CIBIL score is below 750, they must improve CIBIL instantly by building a solid and clean repayment history, building and maintaining a low credit utilization ratio and not having too many hard enquiries on their name. Improving CIBIL is easy. All one needs is some patience and effort.