CIBIL Score Charges and Services You Must Know

Lenders check every loan application against various parameters, such as age, income, debt-to-income ratio, credit score, etc. Lenders do this to ensure their safety and steer clear of borrowers who may default on loan repayment. Of all the factors that lenders check to assess a borrower’s creditworthiness and their intent and ability to repay a loan on time, the most important is the credit score. TransUnion is the most well-recognized credit information bureau in India and the credit score it gives borrowers is known as the CIBIL score. The CIBIL score ranges between 300 and 900, with 900 being the best CIBIL score anyone can have. A good CIBIL score, i.e., anything between 750 and 900, indicates high repayment capacity and therefore, leads to quick loan approval. Borrowers can check CIBIL score anytime. However, to be able to do so, they must pay certain charges known as the CIBIL score charges.

What are the CIBIL Score Charges?

Borrowers must check their CIBIL report often. This way, they will have ample time to take corrective measures in case their CIBIL score is below 750. However, to be able to check CIBIL score, you must pay TransUnion. CIBIL score charges vary based on the subscription plan that a borrower chooses to go for. If you go for the one-time report plan, CIBIL will send you your detailed credit report only once and they will charge you Rs.550 for it. If a borrower goes for the 6-month plan, the CIBIL score charges increase to Rs.800 but the borrower also gets two reports within 6 months in the case of this plan. Lastly, if a borrower opts for the premium plan, the CIBIL score charges rise to Rs.1,200, but the borrower gets four credit reports in the case of this plan.

It must be highlighted here that when a borrower checks their CIBIL score, the enquiry is known as a soft enquiry and has no effect on a borrower’s CIBIL score. On the other hand, when a lender checks a borrower’s CIBIL score, primarily to take a call on their application, it is known as a hard enquiry. Hard enquiries harm a borrower’s CIBIL score. 

Major Factors that Affect Your CIBIL Score

Now that we understand all about CIBIL score charges, let us look at the factors that affect a borrower’s CIBIL score. Understanding these factors is crucial as it allows borrowers to maintain a good CIBIL score  and enhance their chances of getting approved for a loan. So, let us look at the factors that affect a borrower’s CIBIL score.

Credit History

A borrower’s credit history is one of the most crucial factors that affect their credit history. Depending on the credit rating system being used, the credit history makes up 35% to 40% of a borrower’s CIBIL score. A clean repayment history convinces lenders and credit information bureaus of the borrower’s intent and ability to repay on time. Therefore, a clean repayment history inevitably leads to a good CIBIL score. If you wish to increase your CIBIL score, make sure you are paying all loan EMIs and credit card bills on time. Do not let any cases of late payment creep into your CIBIL report. If you miss paying any EMIs, clear them before the next due date and make sure to never default on loan and credit card repayment.

Credit Utilization Ratio

The credit utilization ratio is the ratio of credit used to credit available. Borrowers who exhaust the limit on their credit cards naturally have a high credit utilization ratio. A high credit utilization ratio indicates high dependency on credit and therefore, borrowers who have a high credit utilization ratio have a low CIBIL score. It is important to know all about the credit utilization ratio as it makes up almost 30% of a borrower’s CIBIL score. To maintain a good credit utilization ratio, use your credit cards wisely. Do not exhaust the limit on them every month and if you do, make it a point to clear the whole amount due and not just pay the minimum amount due each month.

New Credit Applications

New credit applications lead to hard enquiries and too many hard enquiries harm a borrower’s CIBIL score. Therefore, borrowers who want a good CIBIL score must apply for credit cautiously. They must limit new credit card and loan applications. Further, if one must make multiple applications, one must never make them all together and instead, spread them out over the months.

Credit Mix

Lastly, the credit mix that a borrower has also affected their CIBIL score. People who have a healthy blend of both secured and unsecured loans have a higher CIBIL score than borrowers who have only secured or unsecured loans in their loan kitty. A healthy loan mix convinces lenders that a borrower will be able to handle all types of credit and therefore, borrowers who have such a mix automatically have a good CIBIL score. The credit mix holds 10% weight in a borrower’s CIBIL score check.

Also Read: How to Check CIBIL Score Online? 

Let us now look at why borrowers must try and maintain a good CIBIL score.

3 Benefits of Having a High CIBIL score

A good CIBIL score offers many advantages. Let us look at the benefits of having a high CIBIL score.

1. A high CIBIL score helps borrowers get approved for a loan quickly. Lenders know that borrowers whose CIBIL score varies between 750 and 900 are quite unlikely to not repay their loan on time. Thus, lenders approve loan and credit card applications from such borrowers almost immediately.
2. Lenders extend their most lucrative home loan deals to borrowers who have a good CIBIL score. Thus, if your CIBIL score check shows a result of 750 or above, know that not only will you get approved for a loan quickly, but you will also get lucrative terms and conditions on your loan, such as low-interest rates, longer repayment tenor, higher loan sanction, etc. 
3. Lastly, if you have a good CIBIL score, you will also have higher negotiating power. Therefore, you may be able to negotiate better loan terms.

Final Words

If you are applying for a loan of any kind such as a Home Loan or Loan Against Property, know that the first thing your lender will do is check your CIBIL score. So, check your CIBIL score from time to time and make sure it is above 750. 

*Terms and conditions apply.

Also Read: Check CIBIL Score with PAN Card for Free, in 3 Steps