Facts about CIBIL Score -1 to 5 | Fusion - WeRIndia

CIBIL score is essential to get a loan. It is a 3-digit score from 300-900. Banks consider customers whose credit score is 750 or above to offer a loan.

CIBIL score generally depends on payment history, utilization of credit limit and percentage of unsecured loans.

If you are paying your EMIs on time, then your credit score improves. You should utilize the credit limit properly. Credit utilization ratio reveals how much credit you are utilizing against how much credit is offered to you.

If you are using a credit card, the usage amount should not exceed 30 per cent of your total card limit failing which might affect your credit score adversely.

Similarly, if you rely too much on unsecured loans like credit card loan or personal loan, then it would affect your credit score. Hence you have to balance your credit ratio of both secured and unsecured loans.

The volume of loan applications and the number of loan enquiries would also affect your credit score. If you apply for several loans at various lenders, it might affect your score adversely.

Even if the loan is not sanctioned, your credit score depicts that you have enquired at various financial institutions which gives an impression to the lender that you are relying too much on loans.

Your age, income, location, employment and residential address also impact the decision of bankers while offering a loan.

First-time borrowers will be given a score of -1 to 1. If your credit score is 0, it reveals that there is no history of credit to track.

The credit score of -1 indicates that credit history is not available where the track record of borrowers is less than 6 months.

The CIBIL score of 1 – 5 indicate that borrowers are new to the field of credit and have a credit history of less than 6 months.

While 1 indicates the highest likelihood of default, 5 indicates the lowest likelihood of default.

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