Significance of CIBIL Score

Suvbharat Times | 03072021 | Lenders are comfortable in giving loans to a customer whose credit score is more than 750. Can a person with no credit history also get a loan? You can get a home loan even if you do not have a government job or higher educational qualification. In such cases, the lender may ask you for bank statements of the last few years to know your financial condition.

The CIBIL Score is a number between 300 and 900, based on your transactions with financial institutions. It plays a vital role in enabling loan deals. The higher the CIBIL score, the higher your chances of getting a loan and the easier the terms are. However, if you have never taken a loan or credit card before, your credit score may be zero.

Banks may also examine your banking transactions in detail, to understand whether you pay utility bills regularly. This lets the lender know about the regularity of your banking transactions. Your spending and saving habits can be gauged from your bank statements, which can determine whether you will be able to repay the loan on time. Credit information bureaus address this problem of lenders through credit scores.

These are some of the optional parameters that can be used by the lender in the absence of regular credit reports. Banks may also ask you to get a guarantee from someone who has a good credit history and credit score. However, these criteria are not perfect and each bank may have different internal parameters. This way you can get a loan even if you have zero credit score.

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