Buying a new car is a significant move. As a result, the majority of people prefer to apply for a car loan. However, when applying for this loan, you must not overlook the most significant factor. Lenders look at your CIBIL Score online, and if you have a low credit score, they may not approve your loan.
CIBIL score need for car loans?
The credit score range begins at 300 and goes all the way up to 900. The score range is broken into five categories based on the likelihood of loan approval.
- Less than 600 – Probability is low.
- Difficulty Level 600-649
- 650 – 699 – Possible, however loan may have a high interest rate.
- 700 – 749 – High Chance
- 750-900 – Extremely High Probability
To approve a car loan application, most lenders require a minimum credit score of 700. If you have a credit score of 750 or higher, the lender may authorise the loan at a reasonable interest rate. Furthermore, if you are seeking for a large loan, a credit score of 750 or above can assist you get it approved.
How Can You Find Your CIBIL Score Online?
You can check your credit score online at CIBIL or any other reputable website. Furthermore, the official CIBIL portal offers one free CIBIL report every year. However, you can obtain free reports from different lenders.
You can generate your CIBIL report as follows:
- Navigate to the Credit Report page.
- Fill in your information. (Name, birth date, and phone number)
- Fill up your financial information. (Average annual income, employment status, and PAN number)
- Enter the name of your city and gender.
- Submit the form.
- Factors Influencing Credit Score
Your credit score is influenced by a variety of things. Among them are:
Credit History: Your credit history has a big impact on your CIBIL Score. Your credit history includes both old and new credit lines.
Repayment History: Missed or late loan payments can have a significant impact on your credit score.
Credit Limit Utilization: Your CIBIL Score may differ depending on your borrowing habits and use of the approved credit limit.
Credit Application Frequency: The number of times you apply for loans or credit cards might have an impact on your credit score, either positively or negatively.
How Can You Raise Your CIBIL Score?
There are various methods for raising your credit score.
- Check your CIBIL Score online to identify any problems or anomalies that need to be corrected.
- Ensure that loan and credit debts are paid on time.
- Avoid using your entire credit limit.
- Choose extended loan terms and a combination of credit lines.
- Applying for many credit cards or loans at the same time is not a good idea.
- Avoid frequently increasing your credit card limit.
- The Advantages of Having a High CIBIL Score for a Car Loan
When applying for a car loan, having a high credit score might be really useful. A high credit score may qualify you for a better vehicle loan. As an example:
If you have a CIBIL Score of 750 or higher, the lender may be willing to provide you a car loan with a substantially cheaper interest rate.
If you have an excellent credit score and want a large loan amount, the lender may grant it.
Your CIBIL Score has an impact on how soon your car loan is granted. A high credit score can help you get your loan authorised quickly.
As a result, having a high CIBIL Score Login is the most effective strategy to have your loan authorised. However, the topic of how to raise CIBIL score arises since building your credit score takes time, and it is preferable to be consistent with maintaining a good score. If you fulfil the lender’s minimum Credit Score criterion, you should have no trouble getting a car loan.