How to Check Credit Score Free Before Applying for a Loan?

minimum credit score for loan

So often the dream needs a proper integration of finance to become a reality. With finance, I mean to say a loan or even a credit card which you may need to fulfill the wishes of a lavish wedding or buying the best of iPhones in the market. But there can be a full stop to the fulfillment of these wishes and aspirations if your credit score is not up to the mark.

Yes, banks and other financial institutions check your credit score before approving a loan or credit card application. Only when the score turns out good do they go ahead. However, you can check your credit score free online before submitting a credit application. It may not lead to an approval but at least give you an idea whether you are eligible for a debt or not.

Check Your Credit Score Free Online

There are many credit bureaus that assign a score to an individual. These bureaus are CIBIL, Experian, Equifax, etc. The score provided by CIBIL is viewed as more important than what’s provided by any other bureau. You can check your CIBIL score by visiting the official website of the credit bureau. All that you need is to share a few personal and credit-related details and create a login. For the credit information to be filled, it’s imperative to have a loan or credit card repayment history of at least 6 months to a year. Subsequent to filling the details, you can create a login by choosing a User ID and password of your choice.

However, the credentials must meet the requirements in terms of alphabets, numeric and special characters. You can thus login using the credentials to check your credit score. Checking score remains free once a year. More than that would lead to a cost of 550 and more.

What is the Ideal CIBIL Score for Loans and Credit Cards?

The minimum CIBIL score for loan should be 700 and above. However, to get the best deal, it is important to have a score of 750 and more. With the best deal, I mean to say a low-interest rate deal aided by a greater loan amount, reducing the requirement of informal lending. The affordable rates would ensure a significant reduction in EMI and overall interest outgo.

How to Improve CIBIL Score?

The score can be greatly improved by ensuring the following cardinals.

Pay Dues on Time – Maintain the habit of paying loan EMIs or credit card bills on time. Well, you may be finding hard to do it as the lavish spending routine would have tied your hands. If you fail to pay on time on a regular basis, it will then bite your score badly. So cut down on all those spends that are not necessary and save the amount needed to repay the dues in full.

Minimum Due – Paying minimum due has become a regularity for most credit cardholders. Yes, credit card statements do come with a minimum due payment amount in addition to showing the total dues, due date and other details. The minimum due, which is calculated at 5% of the overall outstanding balance, may not affect your score directly. But it can if the pattern lengthens for an extended period. There may come a time where paying minimum due can be out of reach. Sooner you get out of this minimum due routine better it is for your credit and financial health.

Vikas Das is one of those expert writers in finance who has enlightened the readers about various banking and investment products like personal loan, home loan, car loan, mutual fund, fixed deposit and others.

Leave a Reply

Your email address will not be published. Required fields are marked *