A key player in your financial matters is of course your credit score. Now, you might be familiar with CIBIL Scores ranging between 300 and 900 and know that a score of 750 or more is considered excellent by most lenders. But what about a CIBIL Score of zero or a negative one? What do these numbers mean, and how do they affect your ability to secure the credit you need?
What is the difference between a CIBIL Score of 0 and -1?
CIBIL Score of 0: A CIBIL Score of 0, often displayed as 'NA' or 'No Activity,' is assigned when an individual has less than six months of credit history. In other words, it means that the person has started using credit recently, and there is not enough data available to calculate a traditional credit score. This can happen when you have just begun your financial journey or haven't engaged with credit products in the past.
CIBIL Score of -1: This score is quite different from having a score of 0. This is not a mark of failure; instead, it signifies a blank slate. A CIBIL Score minus 1 means that you have no credit history whatsoever. It is assigned when there is no previous borrowing history, no credit card in your name, and no track record on which your creditworthiness can be based. Essentially, it is a score that suggests there is no information available about your credit history.
Impact of Minus 1 CIBIL Score
Having a CIBIL Score of Minus 1 can pose challenges when you are looking to apply for a loan or credit card. Most traditional lenders rely heavily on your credit score to assess your creditworthiness. They use this score to gauge the risk of lending to you. Without a credit history or with a minus 1 score, your reliability becomes somewhat of an enigma to them.
However, while traditional lenders might hesitate, not all hope is lost. Some financial institutions and lenders may still approve your application, even with a minus 1 CIBIL Score. They might consider other factors, such as your income, employment stability, and your ability to provide collateral or a guarantor. While your credit score is crucial, it is not the only factor in the lending decision.
If you are worried about the roadblocks posed by having a low or negative CIBIL Score, Bajaj Finserv provides an innovative CIBIL-powered Credit Pass subscription that could be just the lifeline you need. The Credit Pass equips you with the tools you need to establish and grow your creditworthiness. It takes just a couple of minutes to sign up to get your unique 12-digit Credit Pass number, which grants you:
- A personalised dashboard for a complete overview of all your credit accounts in one place
- Insights into the factors that are influencing your credit score, including your upcoming deadlines and repayment history, your credit utilisation, and your recent credit applications
- Monthly updates to your CIBIL Score
- Access to interactive tools, like the Credit Score Simulator, which allows you to understand how taking a loan or credit card might affect your credit score, and the EMI Calculator, which allows you to plan your monthly loan EMIs before applying
The user-friendly interface and unparalleled benefits of the Credit Pass make it an ideal financial companion, especially when dealing with challenging credit situations. It opens doors, provides clarity and guidance, and empowers you to take control of your credit journey from the very start.
