Most people take loans from a bank or financial institution for their business, or to buy a car or bike. In some cases, people get the loan, but some people get into trouble in it and some don’t even get the loan.
So here you should know that for the approval of any loan, Credit Score plays an essential role in it. You can also check your Credit score with your PAN Card, Aadhar Card, Driving license, Passport, etc. You can check your credit score with different free online tools. However, certain details including your PAN number are required to check your Credit Score. Another way to keep your credit score healthy is to keep tracking it regularly.
What is a credit score?
Credit Score is a kind of number which is based on your financial reports for 6 months and based on that report it is decided whether you will get a loan or not. If pending payments of loans and bills are done within a time then the credit score will be good. If you have not made the payments of pending bills then it is hard to get a loan. For a loan, your credit score should be more than 750, by which you will get a loan immediately.
Relation of a Loan with Credit Score:
You should have a deep knowledge of credit scores if your loan is ongoing or you are willing to take a loan. It is a kind of score which determines the probability of getting the loan. If your score is good then it is possible to get a loan we will further discuss how good it should be and how you will get it with a good rate of interest. And if your score is not good then it will not be possible to get a loan or you will have to face many troubles with a high-interest rate. That’s why what is a Credit Score, how it’s calculated, how it affects, and how we can improve it.
CIBIL stands for Credit Information Bureau India Limited it is not a government Institution it is a third-party private organization. They record every loan taken by all the citizens in India.
Whenever you are applying for a loan it can be an education loan, home loan, car loan, or a credit card which itself is a kind of loan, it can be a personal or business loan, etc. CIBIL provides a rating according to your credit. It is a 3-digit score that starts with 300 and ends with 900. 300 means a low score and at this score, you will not get any kind of loan. 900 means a high score and this defines you can repay the loan easily. 750-900 represents a good credit score.
How you can determine a Credit Score?
There are mainly four factors that will affect your Credit Score they have been mentioned below:
Kind of all the major payments that have been repaid for your taken loan.
Mix of loans
Unsecured loans define the kind of loans, where no mortgage, is kept as collateral. Examples- are personal loans and credit cards.
Secured loans are those which have something as collateral. For example- a home loan, a home is a mortgage, car loan car is a mortgage. So if you are having a high percentage of unsecured loans then that goes negative for you and it lowers your score.
Suppose you have a credit limit of 20 lakhs but you already have a loan of about 15 lakhs then you have a lower credit score. Also, suppose you have a credit limit of 30 thousand and you are spending about 20-25 thousand that means you are utilizing it a lot and it goes against you, in the end, this will affect your credit score.
Multiple loans at the same time
Lastly, within a period, if you have taken too many loans or applied for too many credit cards or loans then also your score is reduced.
Steps to check Credit Score:
To check your Credit Score follow up the steps mentioned below:
- Simply log in to www.cibil.com
- Then click on the button on the right-hand side mentioned – ( Get your Cibil Score)
Now, Select a Plan accordingly.
- Then enter your details like Date of Birth, Mobile Number, Email, etc.
- Now make your Password through which you are going to LogIn your ID.
- Then select ID Type and enter the required details in it.
- Now, to confirm your verification and answer all questions correctly.
- Now, click on Payments and continue the process.
- If you are checking your score for once, stop all the schemes and move forward in your account.
- Now complete the verification with OTP or Email for the LogIn process.
- Fill up your information and details in the form.
- To check your Credit Score on the dashboard, submit the form.
PAN Card helps to check your Credit Score. It determines whether you will get a loan or not. A high score will have a greater chance to get a loan. Whereas, a lower-score user might or not get the loan. Even users can check their Credit score with PAN Card based on monthly reports in a year.