CIBIL – The Free Score That Can Change Your Life
Credit is a part of your life as most of your dreams like a home or a car can be purchased on credit. In order to buy something on credit, you would need to go to a bank or a non-banking financial institution. The loans provided for various purposes like a car or a home have varying tenures and varying rates. As a borrower, you need to ensure that you get the best terms for your loan in terms of tenure and interest rates.
Loans are an important source of income for banks and non-banking financial institutions. They need to ensure that the principal and the interest on loans are repaid on time. While increased demand for credit is a positive sign for lenders, they also need to check that the loans don’t become bad or doubtful.
In order to ensure that you as a buyer get the most competitive rates and lenders are assured that there is no default on their loans, the Credit Information Bureau (India) Ltd. or CIBIL was formed.
What is CIBIL?
CIBIL collects information about loan repayment and credit card payment of borrowers from banks and other financial institutions to create a database. This information is provided by its members who include public and private sector banks, non-banking financial companies, and housing finance companies.
CIBIL has been empowered by RBI through the Credit Information Companies Regulation Act 2005 to collect the data from different lenders and submit the collected data without the consent of the borrower.
After complex calculations, a 3-digit number known as your free CIBIL score is generated which ranges between 300 and 900. The higher your free CIBIL score is, the better are your chances of getting favourable terms for your loan. As far as banks are concerned, a higher free CIBIL score indicates a better track record of the borrower.
The information provided by CIBIL is a valuable resource for banks as they no longer have to worry about loan defaults. They just need to check the free CIBIL score of the applicant.
The free CIBIL score is based on your credit report. CIBIL keeps a monthly record of your loan repayments and credit card payments of the past 3 years. The credit report contains the status of your loans including the total amount and outstanding amount written off and the accounts that are settled. It also has your personal details, employment details and earnings, total credit limit, and the monthly expenses.
There two types of reports, namely the Credit Information Report (CIR) and Company Credit Report (CCR) for businesses.
When your free CIBIL score is high, there are several advantages you get. You get special rates of interest for your loan, better options for negotiating higher limits for your loan, faster processing time, as well as less paperwork.
When banks find an applicant with a high free CIBIL score, they are eager to offer the best terms in terms of loan amount, interest rate, and tenure as they know that you have a good credit background.
The best part is the information about your free CIBIL score which helps you realise your dreams such as buying a house, a car, or providing for the higher education for your children can be obtained for free.
Does CIBIL Provide a Free Credit Score?
Yes, you are entitled to a single free CIBIL score and report once a year.
What Is the Process of Getting the Free CIBIL Score and Report?
To get their free CIBIL score, existing members of CIBIL just need to go to myCIBIL, then to ‘My Account’ tab on the top right corner of the website and lastly click on the link ‘Get your free report.’
If you are not a member of CIBIL, then you need to follow these steps:
· Create an account
You need a unique username and password. Then you have to enter your name, email id, and mobile number. It is important that you ensure that your username and password are completely confidential. These can be used anytime in the future to access your free CIBIL score and report.
· Enter your personal details
Your personal details would include your address, date of birth, and identity proof like your PAN card or Aadhar number. Ensure that you enter the details as they appear in your ID proof.
· Verify your identity
An OTP (One time password) will be sent to you for verification of your details or some more details may be requested. It is important to keep all your loan account details like credit cards, home loan, personal loan, and well your mobile phone and email id handy.
That’s it. Your free CIBIL score will now be generated.
The Free CIBIL Score and Report Link Not Visible
If you have already applied for your free CIBIL score and report in one year, this link will not be available on the ‘My Account’ page.
Getting a free CIBIL score when the identity verification is incomplete
If the authentication process is unsuccessful, the identity verification can be completed by contacting CIBIL customer support. Once the verification process is complete, you will get access to your account.
What Other Information Can I Get with My Free CIBIL score and Report?
Apart from your free CIBIL score and report, there will also be personalised loans and offers on credit cards. Any discrepancies or anomalies in your CIBIL report can be resolved by raising a dispute online.
The meaning of no hit
You may not find a credit report or free CIBIL score based on the details provided by you. This is because there is no information about you from any financial institution regarding your credit activity which is known as ‘No Hit’. You can, however, apply for the loan and credit card offers. You need to log in to your myCibil account to check for your report regularly and your free CIBIL score when financial institutions provide you with the information.
Get Financial Freedom Through Your CIBIL Score
Your free CIBIL score opens a lot of doors for you in terms of getting loans at preferential rates to fulfil your dreams. If you are regular with your payments of loans as well as credit card bills, there are chances that you will have a high free CIBIL score.
You will get a better bargaining position when it comes to the tenure or upper limit of your loan. You will have to deal with less paperwork and the time taken to process your loan will be lower.
Improve your free CIBIL score and upgrade your life.