You get what you deserve, an adage which applies to literally every walk of your life.
And particularly, in the case of loan or credit card where the perceived risk is significantly higher, it becomes important for the lenders to check the eligibility of an applicant before saying ‘Yes’ to his/her application. Loans like a personal loan or unsecured credit cards are generally given to the borrowers without them being asked to give security.
When there is no security to mortgage the loan or credit card, the banks and the financial institutions obviously get curious to know every single detail related to a borrower as a default on the payment can put them in tatters. The top most consideration for a lender is to check the credit history of an individual, as it draws a picture of one’s ability to service the debt. The history is prepared by the credit rating agencies such as CIBIL and a few more in India. CIBIL, based on your loan or card payment experience, presents a score which then becomes a marker of your loan or credit card eligibility . So, without any ado, let’s open the discussion on CIBIL score now.
Despite it being a key proponent to your loan or credit card application approval, CIBIL score is yet not taken seriously by most and what happens is the constant rejection of applications made by the customers. By saying, take CIBIL Score seriously, I mean you should avoid a delay or default in the payment of EMI or the card dues. Sometimes, you fail to make the payment on time due to certain exigencies. That’s fine. But it shouldn’t become a regularity. So, avoid being trapped into this bad habit before it traps you bad.
Just a few months ago, two of my friends - Kailash Sehgal and Sumit Awasthi had applied for a personal loan to fulfill their respective needs. While Kailash was more informed on the credit rating front and its possible implications, Sumit was laid-back and had defaulted on his past loan for a fair length of time. Both were optimistic of the approval, but as expected, Sumit’s case was rejected, leaving him frustrated and annoyed. On the other hand, Kailash not only got the approval of the loan but also manage to grab an attractive interest deal.
It all starts with your credit-related activities while servicing a debt at a financial institution. Yes, your timely repayment goes a long way in deciding your loan eligibility. The partner banks and other institutions report your repayment schedule, the type of debt you are servicing, the skipped payments, the interest rate, credit card limit and much more to CIBIL each month. After receiving the report, the authorities at CIBIL sit down and analyze the credit details of an applicant before settling to a score.
A CIBIL report includes the following details apart from a credit score of an individual.
1- Applicant’s personal details such as name, age, gender and his/her existing residential address
2- Details related to employment and earnings of an individual
3- The number of enquiries made by the prospective borrowers to check the credit score
4- A record containing the history of previous loan repayments
5- Loan default and settled loans, if any
6- The credit limit and the credit utilization ratio
Checking the CIBIL Score is as easy thing to do. You can check it online by mentioning a few details. Just visit the official website of CIBIL, furnish few details of PAN Card and the score will pop up on your screen. These details include the name, age, gender, date of birth (DOB) as shown on the PAN Card. You even need to enter the PAN Card number in the prescribed place. In addition, you need to present email ID, mobile number and your current residential address. There can be some terms and conditions, which you should read before clicking the submit button.
So, you have got to know the implications of CIBIL score in this article and how it can be checked online. Do spread the message across your peers so that they would be following a disciplined expense routine so that they won’t default on the loan repayment or the card dues.
Stories by Anvi Sharma