December 4, 2024 · 11 mins read
Santosh Kumar
In finance, it is very important to have a CIBIL score, which is also a good one. A CIBIL score is one of the requirements of banks and other lenders when sanctioning a loan or issuing a credit card. A CIBIL score is also known as a person's credit score since it is calculated on the basis of his credit history. A person's credit history refers to every detail of how he has used his available credit in the past. This means that the credit history includes information such as repayment of loans, credit card bills and EMIs, credit utilisation ratio, credit mix, number of loan enquiries, etc. Based on all these factors, India's four Credit Information Companies (CICs) - TransUnion CIBIL, Equifax, Experian and CRIF Highmark - calculate every one's individual credit score.
Zet App Download from PlayStore
It is very important to have a CIBIL score because it is among the deciding factors whenever banks are trying to assess your eligibility for loans, credit cards, etc. A high CIBIL score is considered to be a good CIBIL score, and applicants with good scores find it easier to get their credit applications approved. Another reason why it is important to have a CIBIL score is that it brings in benefits such as higher loan amount and credit limit, longer tenure, lower interest rates, etc. An excellent CIBIL score also lets you enjoy exclusive credit card benefits such as higher discounts, special offers and beneficial reward points. Overall, a CIBIL score indicates your creditworthiness.
When a person's CIBIL score is calculated, it will always fall within a range of 300 and 900. Scores on the lower side reflect financially irresponsible behaviour in the past, and people with low scores find it challenging to get loans and credit cards. Even if their credit applications are approved, the terms and conditions will be unfavourable.
Your CIBIL score is part of a much more detailed credit report and can be seen in the top right corner of the report. Depending upon your use and handling of credit in the past, you will see a number between 300 and 900. However, some people may find that the CIBIL score is shown to be 'nh' instead of a number. What is NH in CIBIL score?
If your CIBIL score is NH it means you have no credit history. So NH stands for no history or NOHIT.
Read More:: Benefits of Good Cibil Score
If you see NH written on your credit report where your CIBIL score should be, it means that you have not taken a loan, credit card, or any other form of credit yet, and the credit bureaus, therefore, have no information available to calculate your CIBIL score.
As you know already, the credit bureaus need the following information to assess your credit behaviour and generate your credit score:
1. Repayment History
2. Number of hard enquiries
3. Length of credit history
4. Credit Utilisation Ratio
5. Credit Mix
The credit information companies will have all this information only when a person has taken some form of credit. Therefore, it is necessary to take a loan, credit card, etc., to start building a credit history and have a CIBIL score.
Although anyone who has never taken a loan or had a credit card will see NH in their CIBIL score, it mostly happens with students who have not started earning yet or freshers who have been employed very recently.
Read More:: Reasons For Loan Rejection Despite Good CIBIL Score
We have already informed you why having a good CIBIL score is important. It is almost a necessity to enjoy a good and healthy financial life. In case you have no credit history and want to build a CIBIL score from scratch, here are some things that you can do:
By now, you must have realised that getting a loan and repaying it is a great way to build a credit history and get a CIBIL score. You might also be wondering how to get a loan in the first place if a CIBIL score is required to decide your eligibility. Do not worry; many banks offer loans to people who are new to it and have no credit history yet. Though these are mostly small loans that have high interest rates and smaller tenures, they are a wonderful way to get a credit score. For those who are still studying, education loans can be great starter loans that can initiate a credit history for you. Education loans are provided more readily to people with no credit history than other kinds of loans. You can get someone ( a parent, guardian, etc.) who already has a good CIBIL score to act as a joint applicant, and you should get a loan easily.
Do some research about credit cards that your bank offers to people with NH in their CIBIL score. Paying your credit card bills on time gives you a very high CIBIL score. If you cannot get a credit card because of a lack of credit history and credit score, you can always get a supplementary or an add-on credit card.
For instance, many students and people under the age of 18 who are not yet eligible to get a credit card become supplementary cardholders with their parents, who are primary cardholders. What this means is that if you cannot repay the credit card bills, the primary cardholder will be responsible for the payments.
This is a wonderful way of building a credit history, getting a credit score, and also learning how to use and manage available credit mindfully and responsibly. This benefits the primary cardholder as well since good use and timely repayment of the credit card bills improve their CIBIL score as well.
Read More:: What is CMR Rating in CIBIL?
Credit scores reflect how timely a person repays their dues. This includes paying loans and credit card bills as well as EMIs. Therefore, for people with no credit history and NH in their CIBIL score, shopping for something on EMI is a good way of getting a credit score. This could be a home appliance or something else. Paying off the instalments will help them build a credit history and remove NH from their CIBIL score.
While a CIBIL score is a big determining factor regarding your eligibility for a loan, it is not altogether impossible to get a loan with NH in your CIBIL score. Here is how you can get a loan with no credit score as well:
If you require a loan urgently but have NH in your CIBIL score, one of the best ways out for you is to get a co-applicant who has a good CIBIL score. A joint applicant on a loan basically acts as a guarantor of repayment. Without a credit score, banks will obviously find it difficult to trust you to repay the loan amount on time, but when a person with a high CIBIL score co-signs the application with you and takes guarantee of repaying the entire amount in case you fail to do so, lenders will feel assured of getting their money back and will sanction the loan to you.
Apart from your credit score, lenders also take into consideration other factors to judge your creditworthiness and ability to repay the loan along with the interest amount. One of these factors is the status of your employer. When you are employed in a highly reputed top level firm, it increases your credibility and banks see you as quite capable of paying off a loan on time even if you do not have an existing credit history or credit score. It will be even more beneficial if you have been associated with the company for a long time and have a secure and permanent job with them.
Read More:: Is 776 a Good CIBIL Score?
Do you know that there are two types of loans - secured and unsecured? Some asset of the borrower backs secured loans as a collateral with the lender. This means that the lenders have a safety net to fall back on in case you fail to repay the loan. Unsecured loans lack such a safety net from the lender. Therefore, it is easier to get a secured loan if you have NH in your CIBIL score.
It is obvious that with no prior credit history, banks will find it difficult to trust you with a large sum of money, and your loan application will most likely be rejected. However, if you apply for a small amount, you might be able to get a loan even if you do not have a credit score yet.
Having a high income will show lenders that you have a strong ability to pay back the loan. This can help you get a loan even without a CIBIL score. The advantage is much increased if you have a salary account since it reflects a regular flow of income and thus your ability to pay everything back on time.
Read More:: Is 772 a Good CIBIL Score?
NH in your CIBIL score means that you have no credit history yet, and since your CIBIL score is calculated on the basis of your credit history, you do not have a CIBIL score. People who have never taken loans, credit cards, etc - such as students and newly employed people - usually find NH in their CIBIL score. However, CIBIL score is an important factor when you apply for credit, and you must take action to build a credit history and get a credit score. A person's CIBIL score can be anywhere between 300 and 900. In order to get a credit score for yourself, you can start by getting a small loan such as an education loan, a starter credit card, an add-on credit card, etc. Once you start repaying such dues you will gradually build up a credit score. Shopping on EMIs is also a wonderful way of doing this. In case you want a loan and have NH in your CIBIL score, get a co-signer with a good CIBIL score. You can also rely on factors such as good employer status and high income in the absence of the CIBIL score.
1. Is it good to have NH in my CIBIL score?
No. It is not good to have no credit history (NH), and you must build one in order to have a credit score. Start taking small loans and credit cards to initiate repayments, eventually creating your credit history and CIBIL score.
2. What is a good CIBIL score?
Most lenders consider 700 and above a good CIBIL score for sanctioning loans and issuing credit cards.
3. How to see my CIBIL score?
You can see your CIBIL score on the website of any of India's four credit bureaus, the website or mobile app of your lenders, or platforms such as Paytm, Cred, Paisabazaar, and Bankbazaar.
4. Can I ask CIBIL to remove NH from my CIBIL score?
If you do not have a credit history, you cannot ask CIBIL to remove NH from your CIBIL score. However, if you have ongoing loans or are using credit cards but still see NH, you can contact them and ask them to rectify the mistake.
5. Does NH mean 0 cibil score?
Yes, NH means that the person has zero or no CIBIL score at all.
Download the app now
Download the app from PlayStore
