Earlier, Secured Loans were the only Loans offered. With the advent of Unsecured Loans, lenders have undergone a complete change. Unsecured Loans mean you need not keep any collateral for the Loans. With such Loans becoming popular, the onus is on the lender to ensure due diligence.
One tool that lenders exhaustively rely on during Loan application your CIBIL score. It indicates your repayment capability. There are different credit unions that do CIBIL score check based on the following information:
- Repayment of outstanding Loans
- Part repayments and pre-payment of Loans
- Payment of Credit Card dues
- Number and periodicity of Loan applications
- How long you held outstanding Loans
- Number of outstanding Loans
- Type of credit
- Hard inquiries on your credit reports
Such information is generally reported by financial institutions. In India, there are four major credit unions, however, CIBIL TransUnion is the most popular one. Each calculates the scores using a different formula. All the information collected holds different weightage that finally computes the score. Your rating gets calculated out of 900. The more the score, the better your chances of getting a Loan.
How to check them?
People are often confused how to check the scores. The procedure is simple and hassle-free. You can do CIBIL score check free online. You can even access the CIBIL website. Enter the CIBIL website and fill up a form. The form requires details like:
- Personal details
- PAN number
- Aadhaar number
Once entered, CIBIL TransUnion will send a One Time Password to verify your identity. If the OTP does not work, they may call for additional information. Remember that CIBIL will not ask for any financial information like Bank Account number or PIN. Generally, these calls are scams and if you receive them, protect your information from these phishers. Do not overshare any details.
Next, answer questions regarding your Credit Cards, outstanding Loans, etc. Based on this information, your CIBIL score check gets calculated. CIBIL TransUnion may also offer a detailed report for some fees. However, a one-time report is free of cost. The system creates an account in your name. You need to verify your email ID. Once done, your account is accessible. Your account includes all personal details along with your credit ratings.
It is better to check scores frequently. There may be wrong information communicated by financial institutions or some transactions may not be included. Checking them if you plan to apply for any Loan in the future. If you find any mistakes, approach CIBIL TransUnion for rectification.