Banking and investment can seem like daunting tasks, especially to millennial professionals, with all the technical jargon and endless paperwork. One of the most basic concepts that you need to understand before you take the plunge into the investment world is the Credit Score, popularly known as the CIBIL Score.

Understanding what a CIBIL score is is the first step towards building a strong financial future. Whether you plan to take a loan, apply for a credit card, or simply stay financially prepared, your CIBIL score plays a critical role.

A CIBIL Score is essentially understood as a three-digit numeric representation of your creditworthiness, ranging from 300 to 900. It is based on the credit report published by one of India’s most popular and reputed credit bureaus, the Credit Information Bureau (India) Limited (now renamed TransUnion CIBIL Limited).

These credit reports are generated by keeping in view all credit transactions in the past, but excluding savings and investments. The higher your credit score, the more credible you are as a possible borrower. Likewise, if you have a low credit score, that will be considered an impediment to the grant of any form of credit.

In simple terms, what does a CIBIL score mean? It reflects how responsibly you handle borrowed money. This explains what the use of the CIBIL score in everyday financial decisions is.

There are several factors that affect your CIBIL score. They are:

• Repayment history and missed EMIs
• Credit utilisation ratio
• Number of active loans and credit cards
• Length of credit history
• Multiple loan or card applications in a short period

Even a single delayed payment can impact your score. Responsible credit behaviour improves long-term eligibility.

How to Check Your CIBIL Score

Checking your score is easy and free once a year. You can check it through:

• The official TransUnion CIBIL website
• Bank websites
• Loan and credit card platforms

Regular checks help you track progress and spot errors early. This is especially useful if you are planning a loan and want to know what the CIBIL score is for loan approval. You can conveniently check your CIBIL score through the Stashfin app, which provides easy access to your credit information.

By now, it has become obvious that having a healthy credit score is very important for an overall positive financial situation. A credit score is important for getting any form of credit, whether in the form of a credit card or a loan.

On Personal Loans

Personal loans can be the easiest way to fulfil any urgent need of the individual. There are several avenues that one can explore to take a personal loan: A traditional bank, an NBFC, or even websites or apps made to grant instant personal loans.

While applying for a personal loan at a bank, the lender checks the CIBIL score before approval. Although NBFCs are not legally required to follow this, as a rule of caution, they do check the CIBIL scores before approving any personal loan.

Having a healthy CIBIL score ensures that the loan application goes through quicker, as the banks are assured of your credibility as a borrower. It also puts you in a good bargaining position with the bank or lender to negotiate and have flexible repayment options. In addition, the bank or lender can offer you a lower interest rate on your loan.

On Credit Card Approval

Checking a person’s CIBIL score is the easiest way to understand a person’s repayment capacity. So, banks check the CIBIL score to ascertain whether a credit card can be issued to an individual.

A person with a healthy CIBIL score can also be offered higher credit limits and lower interest rates on the credit card bill’s repayment. In fact, many banks already have a minimum CIBIL score requirement for issuing a credit card (standard business practice is that a credit card is not issued if a CIBIL score is less than 750).

Therefore, having a healthy CIBIL score is pivotal for facilitating any form of credit for an individual. These are clear CIBIL score benefits.

Since having a healthy CIBIL score comes with a lot of perks, it is important to know how to maintain a healthy CIBIL score while making any major financial decision. Here are some tips to maintain a CIBIL score:

• Pay EMIs and credit card dues on time
• Keep credit utilisation below 30%
• Avoid frequent loan applications
• Maintain a healthy mix of credit
• Check your credit report regularly

If used correctly, these tips can help improve CIBIL scores and make obtaining credit much easier for the person in need.

Having a healthy credit score has several perks as far as getting any form of credit is concerned. However, if you have a low or no CIBIL score, all is not lost.

Here are practical low CIBIL score solutions:

• While applying for a fresh personal loan or credit line, take along all present sources of your income. If you can prove to the bank that you have all the means to repay the credit, you will most likely be good to go despite having a low CIBIL score.
• You can submit a joint application with a co-guarantor who has a healthy CIBIL score history. Despite your low score, the bank will be able to grant you your personal loan or credit card based on the creditworthiness of your co-guarantor.
• There are certain banks that would issue you a credit card in case you have a salary account with them, even if you have a low or no CIBIL score.
• There are several Non-Banking Financial Companies that are offering a personal loan or credit card without considering your CIBIL score. You can use NBFCs like Stashfin to get an instant personal loan. They are not only quick and easy to get but also offer instant disbursement of the credit right into your bank account with minimum hassle.

• Checking your own score reduces it
• Only loans affect your score
• A low score can never be improved
• Income decides CIBIL score

Understanding facts helps you make informed decisions.

Knowing what a CIBIL score is and what is the use of a CIBIL score empowers you financially. A healthy score improves access to loans, credit cards, and better interest rates. Even if your score is low or non-existent, disciplined credit behaviour and smart choices can help you rebuild and grow.