Myths related to CIBIL score

This is a three digit numerical summary that ranges from 300 to 900. the more your Sybil Higher the score, higher are the chances of your loan getting approved. However, there is still a lot of confusion among people regarding CIBIL score. Learn about the myths and facts about CIBIL to clear the concepts about CIBIL Score Website,

Myth: Low CIBIL score means no loan

People often get worried knowing about their low CIBIL score as it is often underestimated Sybil The score would mean that a person would never be able to get a loan or a credit card. There may be some banks and financial institutions that will not lend to people with low CIBIL scores. Explore some options, there may be some banks that lend to people with low CIBIL scores. However, they may charge higher interest rates on such loans.

Myth: Income, investments and assets affect CIBIL score

As mentioned earlier, CIBIL score is only a reflection of the credit history of an individual. That is, it remains unaffected by a person’s income, investments and assets. cibil ratings A person’s credit history is influenced by credit card bills and repayment history.

Myth: Bounced check can ruin CIBIL score

Since the CIBIL score has nothing to do with an individual’s savings or investments, it will remain unaffected if your savings account check bounces. However, if you miss the EMI or the second installment of the loan, your CIBIL score may come down.

Myth: CIBIL keeps record of defaulters

If you are in the list of creditors of CIBIL, don’t worry as CIBIL has details of almost everyone who has taken loan or credit from financial institutions. That is, even if a person pays installments regularly, his name will be with CIBIL. It is the job of CIBIL to collect and maintain the data of all the creditors.

Myth: Checking CIBIL score and report will lower your credit score

There is a common belief among people that requesting a CIBIL report or credit score is a sign of taking a new loan. That’s why people often feel that unnecessarily checking CIBIL score can reduce their credit score. However, the CIBIL report does not reflect the CIBIL inquiries made by the applicant. Hence it is not possible to know how many times a person has requested for CIBIL report. Rather, regular checking of CIBIL report status is a good practice.

Myth: Prefer cash over credit

If you are constantly following this myth to avoid any damage to your CIBIL score, then you are actually hindering its improvement. If you have never availed any credit despite having a credit card then there will be no credit history. Credit history enables lenders to identify the borrower’s risk appetite and capabilities to repay the loan amount.

The website also cautions people against using cash if they are spending more. Credit cards charge high interest rates in case of failure to repay on time, which leads to accumulation of huge loan amount. In this case, any default can create problems in loan approval.

Myth: CIBIL is only for the help of banks and financial institutions

Fact: It is a credit rating agency which not only helps the lenders to assess the creditworthiness of the creditors but also spreads awareness among the people about their dues. This will eventually help them become more credit disciplined.

Myth: CIBIL can directly improve CIBIL report

If a person wants to get some correction done in his CIBIL report, it is better to approach his respective bank or other financial institutions instead of contacting CIBIL directly. It is not empowered to directly make changes or corrections in the CIBIL report of any lender. Correction in CIBIL report needs to be initiated by the respective banks. However, it may help start the process.