Your CIBIL Score Matters for Loan Evaluation


Your CIBIL Score is an important parameter that your banks consider to decide on how much loan you are actually eligible for.  Your CIBIL score is an estimate of your ability to handle debt funds responsibly.  This is a score of your reliability as well.  CIBIL score is marked anywhere from 300 through 900.

CIBIL Reflect how you honor or dishonor your credit repayment

There are different types of loans you might avail as an individual.  These loans include, but are not limited to home loan, car loan, credit card loan, jewel loan, mortgage loan, personal loan, business loan, and more.

You might buy these loans from different lenders.  With one lender, you might have an excellent credit repayment record and with another lender the situation can be different.

Banks Check your CIBIL Score

When you approach a bank seeking a loan, they check in to your CIBIL score.  They check in to how your payment patterns are.  They check in to the transitory status of your repayment with different lenders.  Considering all these factors, they build a picture of your credit worthiness.

Technically, the credit score speaks for your credit worthiness. So, when you apply for a loan or credit card, your lenders check your credit score with the CIBIL.

Lenders Submit Monthly Repayment History to CIBIL

All lenders submit the repayment history of their clients to CIBIL on a monthly basis.  Based on the reports from your different lenders, CIBIL drafts your credit score.

Your credit payment history in CIBIL is documented as:

  • Standard (STD) if you are making your payments within 90 days
  • Special Mention Account (SMA) where the standard account is transiting to sub-standard.
  • Substandard accounts are those accounts where you are making your payments after 90 days. These accounts are marked as (SUB)
  • DBT refers to an account that is doubtful because the account continues to be substandard for more than 12 months.
  • LSS is used to mark an account that is reporting loss and the money remains uncollectable.

CIBIL score is marked anywhere from 300 through 900.  It is very important for you to maintain a higher CIBIL score.  If your score is 750 and above, you are considered credit worthy.  If you hold a credit score below 750 you are not considered credit worthy (or) you are considered to be a risky customer.

 Maintain Your CIBIL Score

  • If you are using too much credit, you are considered to be credit thirsty.
  • Use just enough credit. Don’t use too much credit.
  • If your joint account holder or co-signee becomes a defaulter, it affects your credit score as well.
  • If you have guaranteed any payment, missed payments will affect your credit scores as well.
  • Pay your dues on time.
  • Late payment affects your score.
  • If you have recently availed a series of loans like personal loans, car loans, credit card loans and more within a short period of time, lenders view your account with a second eye.

CIBIL score is very important for unsecured loan where the loan is released without collateral.  Even in cases of a secured loan, this matters in a great deal. A bad CIBIL score is not the end of the world.  You can repair it by fixing your debts. Just that you have to get disciplined about your credit usage.

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