Learn About Negative Credit Score, Low CIBIL Score improvement, Check Credit Score Facts

-1 CIBIL score mean: The moment we apply for any loan, the first thing which comes in the lenders’ checklist is credit score. Credit score is a score generated based on credit history which is generally a summary of financial statements of loans which a person had availed in the past. The credit score is generated mainly by four companies in India which are CIBIL, Equifax, Experian and CRIF. However, CIBIL is the most popular agency among the four and has become synonymous with credit history. This score is generated for individuals when you apply retail loans and businesses when you apply business loans both. The score is a three-digit number ranging between 300-900, higher the number higher are the chances of loan approval. But many times, we have observed that the CIBIL score is reflected as -1.

What does -1 CIBIL score mean? Whether -1 CIBIL score is good or bad? Whether a loan can be granted on this score? Do I need to improve my CIBIL score if it is -1?

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• What does -1 CIBIL score mean?

When a person has never availed any loan facility or if the person has availed loan but not shown pan card or UID or same contact number, the CIBIL assumes that there is no sufficient credit history of the person. For the people who do not have any credit history, the CIBIL assigns the score as -1. Now when you are aware of What a negative CIBIL score means, let’s see the impact of this score.

Whether -1 CIBIL score is good or bad?

CIBIL score of -1 is considered as neutral. This means the impact of score on credit financing will neither be positive nor negative. However, The lender may ask you to provide some more financial information in case any doubt arises during the loan financing process.

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Whether a loan can be granted on this score?

Yes, the lender may grant a loan and will not deny it because of -1 CIBIL Score. Though CIBIL is one of the initial parameters to decide creditworthiness while granting a loan but is not the only parameter to approve the loan. The lender may ask you to add another joint borrower to the loan to increase the repayment assurance.

Should I improve my CIBIL score if it is negative?

A person should always try to improve his/ her CIBIL score to get better financing opportunities. As CIBIL’s highest range is 900, a score close to 900 is a strong score. Lenders consider it as your high creditworthiness. If your CIBIL score is negative, you should start building your credit history to maintain a good score. You can opt for personal loans, gold loans, credit cards, purchase items on EMI and repay the dues and instalments on time which will build up your credit score. There are many other ways to improve the credit score. To know more about this, you can read our article “what is Credit score and how to improve it”.

Common Things which generally lower credit scores –

In a survey, the company observed that many of the people do not care about the instalment last date. For them if it is 1 or 2 days, it does not matter much. But it will have a significant impact on your CIBIL score if you do it very frequently. Another thing observed is people are not aware of EMI data. Due to which they are not able to the EMI on due date, even if they have money to pay.

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Conclusion

To conclude, the credit score which reflects that the person does not have any credit history is not a bad score; however, to get quick financing approvals lenders prefer scores above 750 and prioritize the loans’ approval. A person should carefully monitor his/ her credit history, if you want to avail benefits of schemes available with banks and other lending institutions like NBFCs. Some of the institutions decide their interest rates on the basis of CIBIL score. If CIBIL score is higher, they will charge you lesser interest rates. Also you can take advantage of a good CIBIL score in various charges and ask your lender to waive them off. Hence it is always good to have a better CIBIL score.

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