{"id":5042,"date":"2019-07-27T07:20:39","date_gmt":"2019-07-27T07:20:39","guid":{"rendered":"\/blog\/?p=5042"},"modified":"2025-01-21T15:20:39","modified_gmt":"2025-01-21T09:50:39","slug":"cibil-score-myths-debunked","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/personal-use-loan\/cibil-score-myths-debunked\/","title":{"rendered":"CIBIL Score Myths Debunked"},"content":{"rendered":"\n

<\/p>\n\n\n\n

It is important to have a clear understanding of Credit Information Bureau of India Limited (CIBIL) score in order to manage your finances well. CIBIL score is a three-digit numeric summary of your credit history. It is a number ranging from 300 to 900. A higher CIBIL score indicates a stronger credit profile and vice versa. A higher score also indicates greater ability to repay debts such as loans and credit card payments.<\/p>\n\n\n\n

There are several myths associated with the CIBIL score<\/a>. Following are five myths about it. <\/p>\n\n\n\n

1. CIBIL\nscore does not affect loan approval process<\/strong><\/p>\n\n\n\n

Banks and Non-Banking Financial Companies (NBFCs) carry out a CIBIL check before lending personal loans, home loans, education loans, and vehicle loans, besides others. This helps them identify whether you will honor your obligations in future and repay your debts easily. You may, therefore, determine and rectify any discrepancies in your score before applying for a loan. Doing so will increase your chances of gaining a loan approval.<\/p>\n\n\n\n

2. Having\nno credit will improve your credit score<\/strong><\/p>\n\n\n\n

There is a pre-conceived notion that having zero credit\nwill improve your credit score. If you have not taken any credit in the past,\nlenders will not have any data to make a viable loan approval decision. This\nmay affect your chances of obtaining a loan. It is, therefore, recommended to\nhave some credit lines as and when you need finance to build a good credit\nscore.<\/p>\n\n\n\n

3. CIBIL\nscore is beneficial to lenders only<\/strong><\/p>\n\n\n\n

This is another myth. A CIBIL score not only helps\nlenders in their loan approval decision, but also enables you to maintain\nfinancial discipline. You may take the necessary steps to improve your score. Make\ntimely loan repayments or credit card payments as missed payments will have a\nnegative impact on your score.<\/p>\n\n\n\n

4. Running\nhard enquiries on CIBIL score is not an issue<\/strong><\/p>\n\n\n\n

Whenever you apply for personal loan<\/a>, car loan, travel loan, or any other kind of loan, the lender runs a hard enquiry. Running numerous hard enquiries could affect your CIBIL score negatively. This generally occurs when individuals apply for loans with multiple banks and NBFCs. Soft inquiries, on the other hand, have no impact on your credit score. Soft inquiries are CIBIL score checks made by you.<\/p>\n\n\n\n

5. A low score means no credit availability<\/strong><\/p>\n\n\n\n

There\nare numerous lenders who have varying credit policies. Though some may not\napprove loans if you have a poor credit, certain other financial institutions\nmay approve the application. However, it is important to know that lenders levy\na higher interest rate and greater charges to those with bad credit. It is\nadvisable to have a good credit score in order to get the best terms of the\ndeal.<\/p>\n\n\n\n

A CIBIL score identifies your ability to repay debts. In order to avoid rejection of a loan when you actually need it the most, it is imperative to get a clear understanding of all aspects related to the CIBIL score. This also ensures that you take corrective measures for building a strong credit score at the right time.<\/p>\n\n\n\n

Apply Now<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

It is important to have a clear understanding of Credit Information Bureau of India Limited (CIBIL) score in order to manage your finances well. CIBIL score is a three-digit numeric summary of your credit history.<\/p>\n

Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":5092,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[24],"tags":[],"class_list":["post-5042","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-personal-use-loan"],"yoast_head":"\nCIBIL Score Myths Debunked - TATA Capital Blog<\/title>\n<meta name=\"description\" content=\"Know about CIBIL score myths and how they affect loan approvals, credit history, and financial decisions and opportunities. 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