February 9, 2025 · 14 mins read
Santosh Kumar
Many often question, why credit? Why have the baggage of a loan, or have a credit for a matter of fact. Credit never fails to help people who have the Need of the hour.
Now, only once you are creditworthy, is when the credit is even given to an individual. Based on the summary of your credit score, it is decided by the firm that you are worthy of credit and this is where your Cibil Score comes into the picture. One's CIBIL Score determines and judges their capability and capacity to repay the loan.
Any citizen holding a bank account is permitted to check their CIBIL Score on the website, www.cibil.com, and now on Phonepe as well. Phonepe launched their credit store on the 31st December 2023 to make the entire process convenient for the citizens of India, to check their credit score and CIBIL Score in order to take up loans especially for heavy purchases such as cars or mortgages.
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Your CIBIL Score is what sums up your credit history. Your credit history is based on how likely you are to pay back your loans, with an interest. The CIBIL Score digits range from 300 to 900 and the higher your scores, the more worthy you are of credit and it’s benefits. Not to forget, a CIBIL Score is a 3 digit number.
In today’s time and space, with technology at its highest peak or maybe on the way to its peak, UPI payments have become the number one mode of payment. It’s easy, it’s quick, it’s convenient as asking for and giving change doesn’t count in as a big deal. Few applications such as Phonepe, is one platform where one can now check their CIBIL Score by just downloading the app and entering your respective details. How to check your CIBIL Score on Phonepe is mentioned below, but first it is important to know based on what factors is credit calculated in India.
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This is the first question any individual would have when they first find out that their credit score matters and are judged to finally be called out as credit-worthy account holders.
Your CIBIL Score shall be calculated based on factors such as
1: Payment History
2: Credit Exposure
3: Credit Type & Duration
4: 20% on Other Factors.
Cibil Score is based on factors such as Payment History, which carries a weightage of 30%. The second factor is your Credit Exposure, which carries a weightage of 25%. The third is the Credit Type and Duration, which will be a good 25%, and other factors, as mentioned above, are 20%. As some may know and also may not, an individual’s repayment history accounts for 35 % of their Cibil Score. Missing your EMI payments and causing inconvenience while repaying your credit can severely ruin your CIBIL Score.
The type of credit also plays a vital role in the improvement of your scores. If you thought availing one type of credit would help your scores, then that’s false. What helps your scores will be a balance of credit, which will contribute positively as 10% in your credit score, making you 100 percent eligible.
Your existing debt is also reflected in your credit report. Where you utilize your credit also matters, along with your existing debt. If your credit is higher than your income, it can also not reflect well in your credit report. So, one must be aware of this factor, too.
Now, one may also quite think, why not take multiple loans for self-benefit self-benefit? Well, let's make that factor clear, too: your CIBIL Score suffers when multiple or too many loans are applied for. A rejection will be applied, and this rejection will be marked in your credit report, too. You must reach the eligibility criteria to get approval for the loan, which will reflect well on your report to finally give you a good CIBIL Score.
Your CIBIL Score is calculated using your credit report summary, credit history, repayment, and utilization. Your credit history includes information such as various loans, credit cards, overdraft facilities, and much more.
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One's CIBIL Score can be positive and negative, too. An excellent CIBIL Score generally ranges between 750 to 900. There are four levels of CIBIL Score: Poor, Average, Good, and Excellent, poor being a Low CIBIL Score and Excellent being a high CIBIL Score. The details are as follows:
1: One can have a credit score in the range of 650 to 750, considered a Good CIBIL Score.
2: Alongside a good CIBIL Score, there is also a Poor CIBIL Score, which ranges between 300 and 500.
3: An Average CIBIL Score is considered to range between 550 to 650.
4: A CIBIL Score in the range of 750 to 900 is considered an Excellent CIBIL Score.
If one would like to check their CIBIL Score, it can be done by following the steps mentioned below:
1: Visit www.cibil.com
2: Click on the option "Get Your CIBIL Score."
3: Upon clicking on the option in point #2, you are required to enter all your necessary details, such as your Email ID, Password, and Full Name. The applicant may have to submit an identification document.
4: The applicant will then be allowed to enter information such as the PIN Number, Phone Number, and Date Of Birth.
5: Select the Option to Accept and Continue.
6: An OTP will be sent to the applicant's mobile number. The applicant must enter the OTP and click on the option to Continue.
7: By selecting Go To Dashboard, the applicant will be able to check the CIBIL Score.
Meanwhile, on the 21st of December in the year 2023, Phonepe launched the “credit” section on its app for account holders to conveniently view their credit scores online and for free, manage their loans, and repay their credit card bills and loans on time.
Following its leadership in payments and bagging the “Instant” or The First Mode of Payment in the top-tier cities, you can now check your CIBIL Score on your UPI apps with ease, just like on the platform Phonepe.
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A few steps to follow in order to check your CIBIL Score on the Phonepe app are as follows:
1: Open the Phonepe App
2: Make sure you are logged in to your account. If not, then register first.
3: Go to the bottom of the screen, click on the Credit section, and click "Check Now".
4: Select Check Credit Score
5: Make sure you allow Phonepe to access all your credit information.
6: You will then be required to provide your PAN, Full Name & Date Of Birth.
After following the steps above, you will be provided with a display of your credit report and CIBIL Score. Another option to check your CIBIL Score is through the website which is www.cibil.com
During the launch of the Credit section on the Phonepe App, the CEO stated that he is highly excited to launch the “Credit” store on Phonepe and make it convenient for Indian citizens to check their credit and CIBIL Scores and apply for loans and credit cards online.
Little did we know that taking out a loan, owning a credit card, following up with payments on time, and having a good past repayment history are key factors in a good CIBIL Score, which can take an individual closer to their Financial Goals. Let's find out the genuine importance and uses of a CIBIL Score.
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A CIBIL score is important for many reasons, including being eligible for loan approvals, having access to good interest Rates, attaining a credit card easily, and many more.
Many lenders are always looking out for individuals who can repay their loans plus the interest. One may want credit but isn't eligible to pay the credit back with interest is one factor the lenders will never accept.
The following outshines the importance of a CIBIL Score in detail:
Loan Approvals: One containing a good CIBIL Score helps you get through approved loan applications. The banks and financial institutions will easily approve these applications.
Interest Rates: No one wants to pay high interest rates after borrowing money. A good CIBIL Score can lead to lower interest rates on loans.
Credit Card Access: With a Great CIBIL Score, one can easily attain credit cards with higher credit limits.
Pre-Approved Offers: yet another benefit with a good CIBIL Score is streamlining the application process. Individuals with a high CIBIL Score receive Pre-Approved loan offers, streamlining the application process.
Financial Reputation: to the lenders, and for the lenders, an individual’s CIBIL Score must reflect well. Only if it reflects above average, is when you’re creditworthiness elevates and you’re trusted too.
Credit History Analysis: An individual’s Credit History has a direct impact on their past credit Behaviour, which includes payment history, outstanding debt, and credit utilization.
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A CIBIL Score has multiple uses for lenders and borrowers, and they are as follows:
1: Application Process: An individual’s CIBIL Score plays a key role in the application process.
2: Creditworthiness: A good CIBIL Score makes it easy for lenders to understand and trust the borrower. Individuals who can sustain their finances efficiently are bound to have a High CIBIL Score, increasing their creditworthiness.
3: A good CIBIL Score is often taken lightly, but one must be aware that many check the CIBIL Score to determine an individual's financial reliability before obtaining mortgages or even agreeing to rent. Hence, the CIBIL Score must not be underestimated at any cost.
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To make sure one reaches their Financial Goals, it is established that one must be reliable enough and have creditworthiness, which comes with on-time repayment and no delays. Every lender would like to be assured of how reliable the applicant is to be able to pay up a loan plus interest, in most cases. Lenders then turn to the individual's CIBIL Score. The most crucial factor in obtaining a high CIBIL Score is that the individual can borrow money when needed. The Benefits of A CIBIL Score is mentioned in the following:
Lower interest Rates on loans: With a good CIBIL Score, an individual can access lower interest Rates on loans and credit cards, which can help save money throughout the life of the loan. A lower interest rate can be paid on big purchases such as a car or mortgage.
Quicker approval on loans and credit cards: The higher a CIBIL Score, the faster the process gets to obtain a loan or a credit card. Approvals aren’t delayed for an individual who obtains a good CIBIL Score.
Beneficial Negotiation Powers with Lenders: With a CIBIL Score, lenders will also be in the loop about one's behaviour when dealing with credit. If an individual holds a high CIBIL Score, lenders are also happy to negotiate as the trust factor exists. This may help, especially when a big purchase is being made.
Improved chances of getting loans with higher limits: A CIBIL Score helps applicants apply for loans with higher limits, as creditworthiness speaks for itself through the score. With a low or below-average CIBIL Score, one does not hold creditworthiness.
Easily obtained higher limits on credit cards: With the help of a Good CIBIL Score, which also means high creditworthiness, an individual can obtain higher limits for credit cards as well. With a positive Payment History Behaviour, an individual is trusted by the lenders for an on-time repayment with interest, which may be lowered. With a good repayment history behaviour, an individual can then have access to higher credit card limits.
Higher chances to obtain pre-approved loans from banks: A CIBIL Score helps banks evaluate an applicant before providing a loan. With a good or high CIBIL Score, the applicant has a higher chance of being pre-approved.
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One must have a good credit score, as a bad score can reflect in the report and eventually make the application process difficult. A good credit score will help in the loan application process, especially if it's for a big purchase, such as a vehicle or a mortgage.
A CIBIL Score is a summary of one's credit score/report. It withholds a poor CIBIL Score, an Average CIBIL Score, a Good CIBIL Score, and an Excellent CIBIL Score.
With good past repayment behaviour, an equal plus sensible equation of your income and your loan, and a few more factors, you may have a high CIBIL Score, which in turn helps you obtain higher credit card limits, higher loan limits, an easy and quick application process, lower interest rates, and positively higher negotiation power with lenders.
To check your CIBIL Score on PhonePe, one must have their PAN, Full Name and Contact Number registered and must also, ofcourse, have a bank account in order to check the CIBIL Score on the app. If one does not hold an account, you must first download the Phonepe app, on the Google store or Playstore, log in or register for an account. Once your account is created and registered, you can head to the credit section and tap Check Now. It is required for the Phonepe app to access your credit information and enter details such as Name, Date of Birth and PAN to display your credit history and CIBIL Score.
A good credit score and an excellent credit score play vital roles in lower interest rates, higher negotiation power with lenders and banks, higher credit card limits and loan limits, quicker application processes, and better loan offers. Hence, having an Excellent CIBIL Score matters and must not be underestimated, as it comes with huge benefits.
Lenders and banks only want a reliable candidate to be giving a loan to. The creditworthiness reflected I'm a high CIBIL Score report helps lenders build trust where they are assured the candidate is reliable enough to pay back the loan amount along with an interest rate. Same as the bank. The bank is not responsible for necessarily providing an individual with a loan. It is especially a strict NO when the CIBIL Score is below average. It becomes a difficult application process when an individual carries an average or a poor CIBIL Score due to his/her past repayment behaviour history and financial history. Hence, it is important to keep a CIBIL Score that is Above Average in order to receive the advantages that come with an excellent CIBIL Score.
1. What is the difference between credit and CIBIL scores?
The CIBIL Score is a type of Credit Score, although, not all credit Scores are CIBIL Score. The main and only difference between the two is the Bureau where the scores are issued.
2. Can I get a lower interest rate loan with an average CIBIL score?
It may be time-consuming as it gets slightly difficult to apply when the CIBIL Score is not good or excellent.
3. What is a good CIBIL Score?
A good CIBIL score is usually a Score above 700.
4. Where can I check my CIBIL score?
You can open the PhonePe App and check your CIBIL Score there. Another good option is to visit the website www.cibil.com.
5. Is a good CIBIL score important when making big purchases?
A good CIBIL Score is especially important when making big purchases. Only with a good CIBIL Score and Credit Report will the bank and/or a lender find the applying candidate trustworthy for a big amount.
6. Do I need my PAN to check my CIBIL score?
Yes, you do need your PAN details to check your CIBIL Score. The PAN is the most crucial document for checking one's CIBIL Score. It contains all of an individual's credit behaviour and financial history.
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