A cibil history is one of the most important criteria that bank or financial institution uses to do a credit appraisal of a loan application. A cibil score is developed by CIBIL ( Credit information bureau of India limited) by collecting and analyzing credit data provided by different banks and financial institutions over a period of time. Your cibil score can have values from 0, -1 and between 300 and 900. Let us analyze different cibil score and implications for you as a borrower –
- “0” cibil history – A cibil score of zero means that borrower’s credit history is available upto period of only less than 6 months. It is also known as “non applicable” or “NA” in banking terminology. More often than not, this score is also treated in a same way as having no cibil score.
- “-1” cibil history – This score indicates that no credit history is available for a borrower. This is also known as “NH” or “no history” in banking terminology. Banks usually don’t take an aggressive call on borrowers with “-1” cibil score. Hence, it is advised for a borrower to build his/her cibil history with the help of small loans and credit cards.
- 300 to 550 – A cibil score in this range indicates that a borrower has been pretty poor in handling debts in the past. This cibil score indicates that borrower must have defaulted on his EMIs and there is a high probability of write offs in your cibil report. It is virtually impossible to get a loan from any bank or NBFC in this range and you have to rely on private lenders for your credit needs.
- 550 to 650 – This cibil score is not considered a good score by most of the banks and NBFCs. Although, it is still better than a score between 300 and 500 but, you might have to explain reasons for having this score with genuine justifications to lender. You can still approach modern age lenders like peer to peer lending platform to fulfill your credit needs.
- 650 to 750 – You are on the right path to achieve a financial nirvana. A score in this range is considered to be quite decent by most NBFCs and some banks. It is a perfect score to build your credit history to achieve above average cibil score. However, you still might have to wait for few point improvements in your cibil report to negotiate for better terms from financial institutions.
- 750 to 900 – If your cibil score lies in this range then, you would be among most sought after borrowers for banks. Moreover, if your cibil score is above 800 by any chance then, you can negotiate for best terms on your loan proposal from a bank in terms of interest and tenure.