In 2023, India showed a 73% rise in the self-monitoring of credit scores, according to a report by TransUnion CIBIL.

What is the reason for this increase in credit discipline? Depending on the intent of the credit score or CIBIL score check, the benefits were shown to include improved credit profiles and access to better credit offers.

A high credit score not only increases your chances of loan approval but also puts you in a better position to negotiate for lower interest rates and flexible loan tenures. This article will walk you through how to check your CIBIL score for free online, all the benefits of doing so, and the various factors that affect your score.

Table of Contents

• What Is Credit Score?
• How to Check CIBIL Score?
• Range of CIBIL Score
• Importance of CIBIL Score
• Factors Influencing CIBIL Score
• Conclusion
• FAQS

What Is Credit Score?

A credit score is a 3-digit numeric summary that represents your creditworthiness, or how likely you are to repay a debt. It is based on your credit history, including your history of paying bills and how much debt you have. The credit score can be provided by any of the 4 credit bureaus in India, of which the most popular is CIBIL (Credit Information Bureau (India) Limited). Therefore, a credit score is also commonly referred to as a CIBIL score. It ranges from 300 to 900, with your credit rating being better the closer it is to 900.

How to Check CIBIL Score

There are 2 ways you can check your CIBIL score for free online:

Through CIBIL Website

CIBIL allows you to check your CIBIL score for free once a year. Here’s how you can do it:

• Visit the official CIBIL website.
• Select the option ‘Get Your Free CIBIL Score’.
• Please register with details like your name, email address, and set a password.
• You’ll likely be sent a One-Time Password (OTP) on your registered mobile number.
• Once your number has been verified, you can access your CIBIL score and view a detailed credit report.

Through other Financial Institutions

Many financial institutions in India let you check your CIBIL score for free through their websites or mobile applications. You’ll likely have to register and follow a similar process to get your free CIBIL score and report.

Range of CIBIL Score

Scores in the range of 650 to 749 are usually considered ‘good credit scores’ and those of 750 and above are considered ‘excellent credit scores’.

Please note that this information is only indicative and different lenders may have different ranges/interpretations.

Importance of CIBIL Score

CIBIL scores are one of the most important deciding factors in loan or credit applications. Let us consider that you are applying for a home loan. Lenders look at CIBIL scores to determine your ability and likelihood of repaying the home loan. Your score can influence the following aspects of the loan approval process -

• The approval itself: You’ll most likely get faster home loan approval if you have a high CIBIL score. On the other hand, a lower score increases the chances of the loan being rejected.
• Loan amount: A higher score may be able to get you a higher loan amount. On the other hand, a low score indicates high-risk borrowers and lenders may hesitate to offer higher amounts.
• Negotiating power: A high score will allow you to negotiate favourable loan terms like lower processing fees or interest rates.

Please note, at SMFG Grihashakti, we consider factors such as income stability, employment history, debt-to-income ratio, overall financial health, and our policy at the time of loan application, in addition to the CIBIL score when evaluating your home loan application.

Factors Influencing CIBIL Score

Let us have a look at some of the major factors that can affect a loan applicant’s CIBIL score.

Payment history

This is one of the biggest factors that affect your CIBIL score. It displays how disciplined you are with repayments of EMIs and credit card bills, utility payments, etc. Timely payments on your credit accounts will have a positive impact on your CIBIL score, while missed payments or loan defaults will lower it.

Length of Credit History

This essentially indicates how long you have been in the credit system. A longer history of responsible borrowing behaviour generally has a positive effect on the CIBIL score.

Credit Utilisation Ratio

This ratio reflects the amount of credit you are using against the credit limit that is available to you. The lesser the ratio, the better your CIBIL score. Ideally, the credit utilisation ratio should be below 30%.

Credit Mix

A healthy mix of secured and unsecured credit or loans can demonstrate your ability to effectively manage different types of loan options. This can reflect positively on your CIBIL score. However, you should be careful not to end up with any outstanding dues that can lower your score.

Conclusion

A strong credit score or CIBIL score is a crucial factor for securing loans with attractive terms like low interest rates, potentially larger loan amounts, and flexible repayment tenures. Regularly checking your CIBIL score, either through the CIBIL website or other financial institutions, will help you stay proactive in maintaining a high score.

At SMFG Grihashakti, the minimum CIBIL score for a home loan application is 700. Provided you meet other eligibility criteria, you can get a loan of up to INR 1 crore* – up to 90%* of the property value – to get your dream home. Evaluate your monthly EMIs on our home loan EMI calculator and take your first step toward home ownership!