CIBIL score for credit card & loan: To get a credit card or bank loan, you must have a good credit score. A score of 750 or more is considered good by the bank. However, some banks also offer credit cards to applicants with low credit scores but the applicant has to meet other criteria of the bank like income, debt to income ratio, place of residence, etc. Banks check the credit score of the applicant to issue the credit card. There are very few banks that offer credit cards to people without a credit score. Therefore, to build a credit score, you need to take a credit card or loan.
If you have ever applied for a loan or credit card, then you must have known that the bank first checks your credit history. He finds out if you have the ability to take a loan? Would give you a loan proved to be risky? The same applies to both loans and credit cards. In the case of credit cards also, the bank sees the CIBIL (credit score) of the person concerned. Based on this, he takes a decision whether to approve the credit card application of the person concerned or not. Today in this post we will tell you what should be the CIBIL score for a credit card? Let’s start-
What is CIBIL?
Friends, before we proceed further, let us first know what is CIBIL? (What is CIBIL) Friends, the full form of CIBIL is – Credit Information Bureau India Limited (credit information bureau India limited). Transunion Cibil Limited is India’s first credit information company.
It was established in August 2000. Its main function is to collect and maintain the credit scores of the citizens of the country as well as various commercial entities. It is regulated through the Credit Information Companies Regulation Act-2005. This reserve Bank of India ie RBI has got a license for this work. On the basis of this information, a credit information report and CIBIL credit score (CCR) are prepared for a person. This CCR is shared with various banks and financial institutions for evaluation and approval. Also, Read.. Railway Kaushal Vikas Yojana Online Form 2022 Apply Now
The 30% Cibil Score depends on whether you are repaying the loan on time or not. 25% depends on a secured or unsecured loan, 25% on credit exposure, and 20% on loan utilization. Also Read … Delhi Skill and Entrepreneurship University Admission 2022 Apply
What is CIBIL Score? (What is CIBIL score?)
Now let’s come to the CIBIL score. Friends, this is a three-digit statistical summary that shows your credit eligibility. This is achieved using the details found in your account and query on your CIBIL report. It is generally between 300 and 900.
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Its high score i.e. close to 900 indicates that your creditworthiness/ability is high. You can easily get a loan/credit card. In other words, a high CIBIL score helps you get quick loan and credit card approvals. Let us also tell your friends that if the application for the credit card is rejected then your credit score gets reduced.
How many credit information companies are there in India at present?
Friends, let us inform you that at present there are four credit information companies in India, which prepare, maintain, and share credit-related data of various individuals/entities with banks/institutions. Their details are as follows-
1. Transunion cibil-
We have already told you that this is the first credit information company in India. It is now known simply as CIBIL. At present, it has more than nine and a half hundred organizations and members. This includes private and public sector banks, non-banking financial organizations ie NBFCs, etc.
Its full name is Experian Credit Information Company of India. Let us tell you that in the year 2010, it is the first institution to get a license under the new Credit Information Companies Regulation Act ie CICRA. Experian’s credit score ranges from 330 to 830.
Let us tell you friends that this credit bureau was established in Atlanta America. In the year 2010, this credit bureau was registered by RBI in India. Its head office is in the USA. It prepares credit reports for individuals as well as small, medium, and large organizations.
This credit information company is based in Mumbai. This high mark company collects and maintains credit information as well as prepares risk profiles of various organizations and investigates organizations.
Why do banks check CIBIL score for credit cards?
Now this question must be coming to your mind why do banks look at the CIBIL score for giving credit cards? Friends, let us tell you that a credit card is an unsecured loan, so there is a risk involved in giving a credit card to the bank. So, whenever someone applies for a credit card, the bank checks his/her credit score, to know the risk involved in giving him/her the credit card. Because credit score is calculated on the basis of an individual’s payment record and etc. When someone applies for a credit card, banks ask for his credit report from the credit bureaus. His payment record in the credit report, credit utilization ratio, number of loans or credit cards he has taken, etc. decides whether to accept the credit card application or not.
In such a situation, when a customer applies for a credit card, the bank first checks how much risk will be in giving a credit card to such person. For this, the CIBIL report of the person concerned is called.
What is included in the CIBIL report of an individual? (What is included in a person’s cibil report?)
Friends, let us now tell you what is included in the CIR ie CIBIL report of a person?
Friends, in this, the previous personal payment record of a person, the number of his accounts, default (if any), credit utilization ratio, as well as how many other loans and credit cards he has taken, etc. are seen.
After this, the bank takes the decision whether to accept the credit card application of the person concerned or not. Let us tell you that customers with a higher credit score are considered more financially capable. The chances of their credit card application getting approved are higher.
What should be the CIBIL score for a credit card? (How much cibil score is needed for credit card?)
Friends, let us tell you that it is considered very good to have a CIBIL score of around 900. But most banks consider a minimum credit score of 750 or above as better for loan and credit card approval. If your CIBIL score is so high, then your loan/credit card application is usually approved.
What does credit score mean?
What credit score should be for which credit card or loan, depends on the different banks. However, if we know which CIBIL Bureau has a good credit score, then it will be easy for us to understand how much credit score we can apply for a credit card. The range of credit scores is given in the table below:
Let us now tell you what is the meaning of which credit score? What does it mean to below? It means a lot. Take a look at this table explaining different credit scores and their meaning-
|300-579||very bad score|
|740-799||very good score|
This score is according to Experian credit bureaus.
What is the CIBIL range of different credit bureaus? (What is the cibil range of different credit bureaus?)
We have given you information about various credit information companies above. Now let us tell you what is the CIBIL range of different credit bureaus. How many CIBIL scores do they describe as good? The details are as follows-
|credit bureau||credit score range||how good cibil score|
|transunion cibil||300-900||over 750|
In what situations do you not get a credit card even if you have a good credit score?
Friends, it happens many times that a person has a good credit score, yet he is unable to get a credit card. There can be many reasons for this, which are as follows-
- Your credit history is low.
- You have either not paid any EMIs recently, or have made them late.
- You are already paying multiple loan and credit card bills.
- Your credit utilization ratio is high.
How can a person improve his credit score?
Friends, let us tell you that if a person wants, he can also improve his credit score. There are many ways to do this, some of which are as follows-
(a) Always make your payment on time-
If you have taken any loan or you have to pay any dues then always do it on time.
(b) Do not use excess credit-
Don’t use too much credit. Take control of this.
(c) Do not take too many unsecured loans-
If you have more than one loan, make sure you don’t have more unsecured loans. Keep enough balance.
(d) If you have a joint account then keep an eye on it-
If you have a joint account, keep track of the co-owner’s financial activities, payments, etc. Lest his carelessness becomes trouble for you.
(e) Keep reviewing your credit history-
It is essential that you keep reviewing your credit history throughout the year. Don’t make it less.
Can CIBIL make any changes in the Credit Information Report?
Friends, let us tell you that CIBIL only collects and maintains the details of your credit history and other things, but it cannot make any changes in the credit information report. It contains only individual or organization-related information.
CIBIL does not classify anyone as good or bad credit or prepare any defaulter list. It does not make any recommendation to banks/financial institutions to sanction any loan/credit application. Does not give the green signal. This decision has to be taken by the respective banks/financial institutions on the basis of the credit score of the individual.
What happens to applicants who have no credit score?
Friends, many times in the credit report, instead of credit score, NA or NH is written. This happens in the case when the applicant does not have any credit track record. Let us tell you that banks / financial institutions usually show less interest in giving loans/credit cards to applicants with NA or NH scores as per their credit policy.
Now let us tell you what is the meaning of NA and NH? Friends, it means that you do not have any credit history i.e. you are new to the credit system. This also means that you have all the add-on credit cards and you do not have any credit exposure.
What Information Is Entered in a Credit Information Report?
A credit information report contains complete information about the account of an individual/organization, transactions therein, defaults if any, other loans taken, cards, etc.
How many credit information companies are operating in India?
There are mainly four credit information companies operating in India. This includes TransUnion Cibil, Experian, Highmark, Equifax.
What is the CIBIL score considered better for taking a credit card?
A CIBIL score of 750 or above is considered better for taking a credit card.
Can a person also improve his credit score?
Yes, one can also improve his/her credit score. We have told you the methods for this in the above post.
Which is the first credit information company in India?
TransUnion CIBIL is India’s first credit information company.
What is the function of CIBIL?
Its function is to prepare the credit report of an individual/organization and share it with the bank / financial institution so that the bank can make a decision on sanctioning the loan/credit card application of the individual/organization.
Which company is known by the name CIBIL?
TransUnion is known by the name Sibyl.
What is CIBIL Score?
It is a three-digit statistical statement that shows your loan/credit card availability.
What is the full form of CIBIL?
The full form of CIBIL is Credit Information Bureau India Limited.
What is the credit score required to get a credit card?
Most banks consider a credit score of 700 or above as good. You can also get a credit card with a low credit score, if you already have a relationship with the bank or you meet other terms and conditions of the bank.
My CIBIL score is zero. How do I get a credit card?
There are some banks that give credit cards even to people without a credit scores, but they have some other conditions like income, how long you are working, etc. Apart from this, you can also opt for a secured credit card.
Do I have to pay to check my CIBIL score?
No, at Paisabazaar.com you can check your credit score for free and get your updated credit report every month without any charges. Click here to check your credit score.
Will having more credit cards affect my credit score?
While calculating your credit score, the credit bureaus take into account the number of loans or credit cards you have. But if you pay all in full on time, your credit score will not be affected.
Friends, through this post we have informed you What is the CIBIL score for a credit card? Hope this post will prove to be very useful for you. You will find it helpful to you while applying for loans and credits etc. If you have any questions regarding this post, then you can freely tell by commenting in the comment box given below. We look forward to your feedback and suggestions. ..Thank you.