CIBIL score and CIBIL report is an important thing that the lenders check when one wants to apply for a loan.
Banks and other lenders ask for both of these before processing the loan application. CIBIL score and CIBIL report are part of every individual’s credit history.
If the CIBIL score of the borrower is not good, there are chances of loan application rejection. The borrower can sometimes also get confused between the CIBIL reports and the CIBIL score and might consider both to be the same.
What is a CIBIL report?
CIBIL report is a detailed report which contains your credit history. It contains information like contact details, professional details, loans taken previously, the loan repayment history, the criminal history of the individual, if any, and credit details. This gives insights into the financial behavior of the borrower.
What is a CIBIL score?
CIBIL score is a 3-digit number, and is a summary of the CIBIL report or the numerical representation of the CIBIL report.
It tells about the previously availed loans and their repayment history. This helps the lender understand if the borrower would be able to repay the loan.
Even though there is a difference between both, they both play an essential role while getting a loan application approved. A thing to note here is that individuals who pay their EMIs on time have a good CIBIL score.
In order to improve the CIBIL score, the credit utilization ratio has to be below 30%, and all of the bills have to be paid on time. The CIBIL score range is from 300-900, and a CIBIL score of 700 is considered good. Most of the lenders provide business loans at low-interest rates to only individuals who have a high CIBIL score since the risk of any kind in this is very low.
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