How Personal Loan Providers Judge an applicant while applying for a loan?

To evaluate one’s creditworthiness, most of the potential lenders view your CIBIL score. Yes, because it is one of the most crucial factors that help you grant a loan from lenders. So, if your CIBIL score is low then your loan application may straightaway be rejected by personal loan providers. You need to keep your CIBIL score in line if you want to avail credit, especially of large amount. But, there are so many people or applicants who are not that much aware of CIBIL, as the concept should reach up to the masses because your careless mistakes can ruin your credit score completely.

So, what is that CIBIL?

Credit Information Bureau Limited of India, it is the nation’s foremost credit information company that maintains the records of all credit related transactions of individuals and all those companies including credit cards and loans. All these records (in digitized and paper) are submitted to CIBIL by the registered member lenders and other financial institutions on a periodic, i.e. on a monthly basis. And, based on the input given by the lenders, CIBIL issued a credit information report and a credit score. So, basically it is a repository of all credit-related information, and it does not make any lending decisions. It provides data to personal loan providers and to other financial institutions that use it as a quick reference guide to filter out loan applications. Along with this, CIBIL provides some efficient resources to lenders that help to gauge your credit-worthiness.

And, what is a credit report?

It is an all-inclusive document that depicts your borrowing history and repayment track record and provides details to personal loan providers. The details contain info about your credit worthiness which is eventually based on your historical current transactions. The credit information company CIBIL collects and maintain all your records, i.e. credit-related transactions reported by personal loan providers or credit card companies. This information contains details about your loans taken in the past, credit card repayments that include late repayment or missed payments (if any), details of queries proceed by the lenders on credit or loan applications made in the past, all current on-going loans, your card credit limit, etc. A credit report is a document that gives the timeline of your credit history across all the lenders over a significant period of time. And, if your CIBIL score and credit report are good, it gives you an edge to negotiate with the lenders regarding personal loan percentage. Well, let us share a glimpse of what details a credit report contains-

• An applicant’s personal information such as name, age, residential address

• Monthly income and employment details

• Details of previous settled loans or default. (Credit card payment defaults)

• And, of course, your credit score.

Now, you must be wondering what a good CIBIL score is?

Well, usually a good CIBIL score is 750+. This three-digit number speaks a lot about your past repayment track record, and likewise, you can ask multiple lenders for a better deal on personal loan percentage. CIBIL measures an applicant’s credit score from 300 to 900. So, on the basis of your score, the chance of getting a loan sanctioned from a lender is cemented.

Hope this information has been helpful to you! Happy Borrowing!