Minimum CIBIL Score

CIBIL Score is the yardstick to measure your repayment behaviour. A good CIBIL Score range is 700 to 900. Personal Loans can be a resource for individuals with a  minimum CIBIL Score of 750 and above. Read on to get a complete understanding of the minimum Credit Score required for various loans.

What is the Minimum CIBIL Score?

The scale to measure CIBIL Score is between 300 to 900. The score is considered better as you move up from 300 to 900, with 300 the lowest or a very poor score and 900 the highest and the best credit score. 

The impression can be either made or marred with your CIBIL score when you apply for a loan with any lender. The first verification will be of your financial stability and repayment capacity. Suppose you do not fit into the minimum CIBIL score required category and the low score is mainly due to persistent delay in servicing EMIs and mounting overdue. In that case, you will be a potential threat to the lenders as a borrower. The loan application will be outrightly rejected. 

If you can give justified reasons to the lender for the delay or the EMI missouts, then the loan may be considered even though your score is not within the good CIBIL score range required but is not below 650. However, the loan will, be granted at a higher rate of interest and with stringent terms and conditions.

If you intend to improve your credit score, you can work out a strategy by consolidating the debts, including credit card dues and paying off the debts with the new loan. You should then pay the EMI of the new loan promptly on the due, and the credit score will increase automatically.

Additional Reading: What is Equifax cibil score?

CIBIL Score Range

Credit Rating Companies like CIBIL, Equifax, Experian and CRIF have made it convenient to get overall information about the credit profile of a customer. Earlier it would be a herculean task to gather information about the credit history of a customer. Now, a Credit Report serves as a ready reckoner for the lenders, and they are able to gauge the repayment capacity of the prospective borrower. With this, the loan appraisal process has become simpler and faster.

The  Credit Rating Agencies draw the Credit Report based on the loans and credit cards information provided by various financial institutions. The information is provided periodically, which is then collated to form the Credit Report. The Credit Report contains information about the payment status of the loan accounts, the duration of the loans past due, credit limits utilisation, age of the loans etc. A proprietory algorithm calculates the Credit Score with the credit history available. The Credit Score may depend on the Credit Scoring Model formulated. Some of the Credit Rating Companies may even consider the income while arriving at the score. 

The Credit Score Range is generally between 300 to 900, and the score obtained indicates the likelihood of the repayment of the debt and the creditworthiness of the individual. The higher the score, the better will be the impact. 

TransUnion CIBIL is one of the first credit rating agencies in India and is considered the most reliable source for credit information. The minimum CIBIL score is set by lenders for loans and credit cards provided. The criterion of minimum credit score differs from lender to lender and the type of loan applied for.

The minimum CIBIL score required for secured loans ranges from 650 to 750, whereas the minimum credit score for unsecured loans is 750 and above. However, the minimum CIBIL score for loan stipulation differs from lender to lender.

It is observed that the credit information is not provided to all the Credit Bureaus. So of late Credit Score of any two Credit Bureaus are insisted upon to verify the financial status of the customer.

Additional Reading: What is the maximum cibil score?

Minimum Score for Home Loan

CIBIL Score is one of the factors that determine your eligibility for a home loan. It is an indicator of your responsibility towards repayment of the home loan within the stipulated tenure. The scale to measure CIBIL Score is 300 to 900. Generally, a CIBIL Score above 750 is considered good and you maintaining your score at this minimum CIBIL score for home loan makes you eligible for a home loan while increasing the chances of approval of the loan application much higher.

While availing of a home loan, CIBIL Score has several implications. You need to understand how a CIBIL Score would impact your eligibility for a home loan. If your credit score is either the required minimum CIBIL Score for home loan or higher, then it

  • Defines your financial status and repayment capacity
  • Speeds up the loan approval and makes a higher loan amount possible.
  • It gives you the power to negotiate for better interest rates.

The minimum CIBIL Score for SBI home loan is, however, between 650 and 750.

What are the indications of the CIBIL Score in terms of your eligibility? Each score range has its own implication.

  • Above 300 and up to 599: When credit history is poor, the score will scale down below 600 and is not a good sign as far as the lenders are concerned. It conveys the poor repayment history of the borrower, and there are high chances of the loan application being rejected. The lender will be sceptical about your capacity to repay the loan within the stipulated time.
  • Above 600 and up to 749: The chances of being eligible for a home loan is bleak but not impossible. Some of the lenders like SBI have a lower minimum score range to be eligible for a home loan. The minimum CIBIL Score for SBI home loan is 650 to 750. If you approach these lenders, you will have a better chance of loan approval. But other lenders look into factors like regular income, employment type, the existing loans etc., for a credit decision.

Above 750 and up to 900: This is considered the ideal credit score range, and availing of any loan will be a cakewalk for individuals with this score range. They will also be bestowed with lower interest rates, higher loan amounts, flexible repayment options etc.

Additional Reading: How to read cibil report?

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Minimum CIBIL Score for Personal Loan

Your CIBIL score is the most important aspect that determines the eligibility for a loan. Evaluation of a customer’s repayment track, dependency on credit, and creditworthiness are done based on the CIBIL Score. A good credit score for easy access to any credit, including credit cards. What is a good credit score, and what is the desired good credit score range? Given below is the various levels of credit score range that defines your financial health

  • 300 to 599: Poor
  • 600 to 749: Fair
  • 750 to 849: Good
  • 850 and above: Excellent

The higher the score, the better will be the prospects of getting approval for a loan, along with advantages of higher loan amounts, quick approval, better interest rates etc.

The minimum CIBIL score required for a Personal Loan will be 750. For a score below 750, other factors like income, the combination of loans availed, utilisation of credit etc., will be considered before rejecting or accepting the proposal. 

Additional Reading: How to get loan for low cibil score?

Minimum CIBIL Score for Credit Card

A good CIBIL Score and preferably 750 and above is the primary eligibility criteria for a Credit Card. Though the minimum CIBIL Score for Credit Card is stipulated by almost all the banks, individuals with a Credit Score below 750 will also be eligible on a case to case basis. Other criteria like income, stability of employment etc., will be accounted for while sanctioning credit cards for individuals with a score below the required 750. Since the risk attached to such credit is higher, the credit limit will be lower, and the rate of interest will be higher. There may also be restrictions on the usage of the Credit Card.

So it is vital to maintain the Credit Score at 750 and above to get quick and easy approval for a Credit Card as all banks insist on compliance with the minimum CIBIL Score for Credit Card criteria.

Additional Reading: How to check cibil defaulters list?

How to Improve Low CIBIL Score?

CIBIL is one of the crucial factors for a candidate to be eligible for any credit facility. If your CIBIL score is 700 and above, then you can get approval for credit facilities with great ease. You will find it harder to get approval for a loan if your score is below 650. It is not that all avenues for availing of a loan with a score below 650 are closed. You still can find some lenders who will entertain a score as low as 650. Having said this, it is also essential to understand the factors that could deplete your Credit Score and what are the means to improve the score to be able to get easy access to loans in the future. 

The following are the main reasons for a Low Credit Score

  • Delayed payments of EMIs and Credit Card Dues.
  • Missout of EMIs
  • A disproportionate mix of secured and unsecured loans with unsecured loans on the higher side.
  • Preclosure of old loan accounts.
  • Multiple enquiries for loans within a short span.
  • Optimum utilisation of credit limit.

You should cultivate the habit of reviewing your credit score periodically, and whenever you notice a decline, you should follow the steps given below to improve the score.

  • Keep your good old accounts alive.
  • Minimise the credit card utilisation to less than 50% of the limit.
  • Contemplate on getting the credit card limit enhanced to keep the limit utilisation ratio below 50%.
  • Do not delay EMI payments.
  • Make sure even utility bills are paid on time.
  • Check the Credit Report for any discrepancies and get it resolved before you apply for a loan.
  • Do not apply for several loans and credit cards within a short gap.

If you follow the above steps, you will never have to wonder how to improve my CIBIL score as the score will never go down the minimum CIBIL score required level.

Additional Reading: How to raise cibil dispute?

Importance of Credit Score to Applying for a Loan

A Credit Score is a certificate for your financial status and creditworthiness. To form an impression on your lender, you need to have a good credit score, ideally between 750 and 850. Since a lot depends on the Credit Score, right from quick approval to concessional interest rate and quantum, it is very crucial to have a good credit score while applying for a loan.

You can find CIBIL Score easily by logging into the official website of Trans Union CIBIL. You can check CIBIL Score by PAN Card on the website by providing other details like name, mobile number, email address, etc., along with the PAN.

Additional Reading: What is CRIF cibil score?

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FAQs

✅What is the minimum CIBIL score for a loan?

CIBIL Score is the prime deciding factor besides other aspects like age, income, employment, etc. The reason being the lenders will be able to foresee the fate of the loan by reviewing the Credit Report, which depicts the financial health, the repayment track and the frequency of loans availed.

Lenders normally consider a score between 750 and 850 as the ideal score to provide any loan. The minimum CIBIL score for secured loans will be between 650 and 750, while the minimum CIBIL Score for Personal Loan and Credit Card that are considered unsecured is 750 and above.

✅What is the minimum CIBIL score required for a loan?

A minimum CIBIL Score for loan is the threshold score considered as good stipulated by lenders for extending credit facilities. Having the prescribed minimum score means you are creditworthy and a responsible borrower who pays the EMIs on time. The minimum CIBIL Score for Personal Loan is 750 and above, while the minimum CIBIL score for secured loans like Home Loans and Credit Cards is 650 and above.

✅How much CIBIL score is good for a personal loan?

You can get approval easily for a personal loan if your CIBIL score is above 750. Some of the lenders consider a CIBIL Score between 720 and 750 as good for a Personal Loan.

✅Can I get a loan with a 500 CIBIL score?

A CIBIL Score between 300 and 500 is poor and such applicants are not considered responsible borrowers. The lender will be sceptical about the ability of the applicant to repay the debt within the stipulated time, and such applications will not be easily approved. 

If you look harder, you may find lenders who provide loans for bad credits but with a higher rate of interest.

✅Can I get a Personal loan with CIBIL 650?

The minimum CIBIL score required for Personal Loan is 750. However, a Personal Loan for a score below 650 if you

  • Declare other sources of income with proof and convince the lender that you will be able to repay the loan despite the low score.
  • Include a co-obliged with a regular source of income and a good credit score.
  • Can provide securities like fixed deposits that can be easily liquidated.

✅What is the minimum CIBIL score for an SBI home loan?

The minimum CIBIL Score for SBI Home Loan is 650 to 750.

✅Can I get a home loan with a low CIBIL score?

You can get a home with a low CIBIL Score if you include a co-borrower who has a regular income and has a good credit score. If you plan to give your house on rent, you can declare the probable rent as additional income that will enable you to repay the loan promptly.

✅How much loan can I get on 35000 salary?

The loan quantum depends on various other aspects like CIBIL Score, debt to income ratio, stability of employment besides the salary. You will have to contact the lender to get the eligible loan amount by providing the other details required.