What is Zero vs Negative CIBIL Credit Score: What’s the Difference and Why It Matters?

4 min 24 Feb 2023

Zero or Negative Credit Score Explanation

Highlights:

What Your CIBIL Score Says About You
What Does a Zero Credit Score Mean?
What is a Negative Score?
Can you Avail of a Loan if You Have a Zero or Negative Credit Score?

In today’s world, both individual consumers as well as businesses rely greatly on credit. Several factors determine the ease of availability of credit and the most important of these factors is the credit score. An individual’s credit score is a numerical representation of their creditworthiness and repayment capacity. Credit bureaus collect data on a borrower’s attitude towards credit and its repayment. T

An excellent or high credit score not only leads to quick approval but also makes one eligible for beneficial loan terms and conditions, such as a lower interest rate, longer repayment tenure and a high loan sanction. But, what is an excellent credit score or what is the minimum CIBIL score for loans? What does a CIBIL score of 0 mean? Is it possible to have a zero credit score or a negative credit score? This article answers these questions. 

Here’s What Your CIBIL Score Says About You

An individual’s credit score is a marker that allows credit issuers to check a borrower’s creditworthiness and ability to repay a loan on time. In simpler words, a borrower’s credit score apprises the credit issuer of the risk involved in lending credit to the borrower. If you have a very good credit score, you can get approved for a loan quickly, get offers from almost all lenders and get the best loan terms and conditions. Before we proceed further, let us tell you a little bit about the CIBIL score range for loans. 

If your credit score is 750 or above, yours is an excellent or a high credit score and availing of a Home Loan can be quite easy for you. A very good credit score falls within the range of 750 and 800. Anything between 625 and 750 is a moderate or fair credit score. Credit scores below 625 are considered low credit scores. If your credit score falls within the fair or low categories, availing of credit may not be easy for you. and if you have a good credit score, your credit issuer can extend better loan terms and deals if you attach a financial co-borrower or guarantor. However, if you have a very good credit score, you can enjoy quick approval and disbursal and if your credit score is excellent, lenders will offer the best possible deals for you.

Also Read: How to Increase Your CIBIL Score Above 800

However, is there a thing like zero credit score? What does credit score 0 mean? What is a negative credit score? Read on to know the answer. 

What does a Zero Credit Score Mean?

Credit information bureaus decide a borrower’s credit rating based on their credit history. However, when your credit history is still young or in other words, you have only recently availed of credit for the first time, you will have a zero credit score. A zero credit score simply means that your credit history is not available with the credit information bureau to give you a credit rating based on it. 

So, should you be worried if you have a zero credit score? Not really. 0 is not a bad credit score – it simply means that it will take some time for your credit history to build up. 

What Does a CIBIL Score of Minus 1 Mean?

If your credit history is less than six months old, credit information bureaus will give you a negative credit score. A credit score of negative (-1) simply means that you do not have a credit history and that you have not taken any credit to date. Therefore, the credit information bureau does not have enough information to decide if you are a reliable borrower or not. Now, the question is: is it possible to avail yourself of a loan if you have a zero credit score or if your credit score is negative (-1)? Let’s find out the answer. 

Difference Between a Zero (0) and Negative (-1) CIBIL Score

To summarise, here are the differences between a zero (0) and a negative (-1) credit score:

Aspect	Zero (0) CIBIL Score	Negative (-1) CIBIL Score
Meaning	Indicates that there is some credit activity, but it is insufficient for CIBIL to calculate a valid credit score because the credit history is too short	Indicates that there is no credit history at all, meaning CIBIL does not have ay data to assess your credit behaviour
When It Happens	You have recently started using credit, such as a first loan or credit card, but your credit history is less than six months old and not enough for score generation	You have never taken any loan or credit product, nor has any credit data been reported by lenders to CIBIL
Credit Bureau Terminology	Often reflected as ‘NA’ (Not Applicable) or 0 when there is insufficient credit history to generate a score	Often reflected as ‘NH’ (No History) or -1, indicating no credit record exists
Credit History Implication	Some credit activity exists, but there is not enough repayment data available yet	No borrowings or credit engagements have been recorded, so CIBIL cannot create a credit profile

Steps to Verify a Zero (0) or Negative (-1) CIBIL Score

To verify whether your CIBIL score is zero (0) or negative (-1), follow these steps:

Visit the CIBIL check form.
Enter your basic details, including your name, mobile number, and date of birth.
Next, provide your PIN code, PAN, and email ID as required.
Click on ‘Generate OTP’ and enter the one-time password sent to your registered mobile number.
Once the OTP is successfully verified, your credit score will be displayed instantly.
If you would like to review the complete details, select ‘Download Now’ to access your detailed credit report.

Is it Possible to Avail of a Loan if You Have a Zero or Negative Credit Score?

While it will be difficult for you to avail of a loan if you have a zero or negative credit score, know that it isn’t entirely impossible to get approved for a loan with a negative or zero credit score. Here are a few tips that will help you get approved for a loan even if your credit score is 0 or (-1). 

To start with, if you have a zero credit score, be patient and focus on repaying your loan on time. This will help you build a good credit history. On the other hand, if your credit score is negative (-1), apply for a small loan and repay it on time to build a good credit history. 

If you have a zero credit score and you want to avail of a loan, you should try availing of a secured loan. A secured loan is a type of loan that involves collateral. Under this type of loan offer, a borrower pledges an asset as security. This asset could be a residential or commercial property. Since secured loans involve security, the risk involved for the lender goes down in the case of such loans. So, if your credit score is zero or negative, apply for a secured loan and not an unsecured one to improve your chances of loan approval. Further, repay the loan on time to build your credit history and increase your chances of loan approval in the future. 

Lastly, try borrowing money from a lender with whom you already have some history or a lender who is willing to assess your application based on factors other than credit score, such as your income, employment history, and job stability.

How to Build Your CIBIL Score from Zero or Negative?

To establish a CIBIL score, you can do the following:

Start with an entry-level credit facility, such as a secured credit card or a small loan
Pay all of your EMIs and credit card bills on or before the due date.
Don't exhaust all of your credit. Keeping your balances low compared to your total limit keeps your credit score healthy.
Only apply for credit when you really need it, because applying for multiple loans in a short period of time can trigger multiple hard enquires that can harm your score.
Check your credit report to ensure accuracy and raise a dispute if you notice any discrepancies.

Conclusion

Many borrowers assume that a zero or negative credit rating is a bad thing; it is not. It simply means that credit information bureaus do not have enough information about you to assign you a credit score. If you see a 0 or -1 on your credit report, do not get disappointed. Instead, use the tips mentioned in this article to build your credit history and credit rating. Alternatively, if you need a loan urgently, opt for a secured loan over an unsecured one to receive quick approval. 

A zero credit score means the credit bureau doesn’t have enough credit history on you yet (usually because your credit history is very new). A negative (-1) credit score means you have no credit history at all—no recorded credit activity—so the bureau cannot assign a score.

A zero credit score can make loan approval challenging, since lenders don’t have enough data to assess your repayment behaviour. However, demonstrating other proof of repayment ability may help.

You can build a credit score from zero by taking small credit accounts or secured loans and repaying them on time. Consistent, timely repayment helps a credit bureau gather enough data to assign you a positive credit score.

It is generally good practice to check your credit report regularly so you can monitor your credit history and ensure everything is being reported correctly as you build your score.

A credit score is reported as -1 when you have no credit history at all, meaning you haven’t taken any loans or credit yet, and the credit bureau cannot generate a score due to lack of information.

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