Is paying better than applying for a free CIBIL score?

02-Dec-2015 written by : FSI-Team

In today’s times, the CIBIL scores can be considered to be your passport to availability of loans and other credit facilities. Therefore it becomes highly important to check the scores. However, each one of us would like to avoid the charges wherever we can. But is it worth to obtain a free cibil score or should one spend the money to get the CIBIL report?

Decoding CIBIL Score?

Credit score which is popularly known as the CIBIL score (by the virtue of it being the first credit bureau in India) is an analytical outcome on your credibility, that takes into account various factors like your repayment, type or loans, age of credit etc to arrive at the score. In India the score rages from a low of 300 to a high of 900 and a score of 750 is considered to be a good score for one to be able to get access to loans.

Is free credit score available?

The answer is both yes and no.

Four credit bureaus have been extended license by the RBI to operate in India. These are CIBIL, Equifax, Experian and CRIF High Mark. While you can choose to obtain a copy of your credit score and report from any or all of these bureaus, at a cost, there are a few tools that do give you an understanding on where you stand in terms of credit score. Then the free score can also be obtained from that gives actual credit bureau score.

What role do the scores play in loan approval?

While the scores are an indicator of your credit health, in India, the scores in particular do not impact the credit underwriting decisions for all products. Especially the loans like personal loans and home loans are decided upon by the under writers only post reviewing the complete credit report.

So what should one do?

In case a person is applying for a product like credit card, then obtaining the free score can be a good idea, however in case the person has had impairments in past and has defaulted on his loan repayments; or in case the person wished to apply for a large ticket loan then, obtaining a full credit report shall be preferred since it shall give complete details on each of the accounts (past or present)

What are the next steps?

Once you have your report in hand, should you need help to interpret it or guidance to improve your score, consider availing of the services of credit health management companies like Credit Sudhaar. With a professionally trained credit counsellor assigned to you, over a period of time you can look towards not only enhancing your score but also maintaining it subsequently.

Good credit health can dictate your financial future – whether a loan, credit card, telecom connection or even renting a house or apartment to stay! So now that you know the critical nature of the report, why not obtain a copy and get credit healthy today!



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