Guide on bad CIBIL score — loan impact & improvement tips

The CIBIL score is a three-digit number that reflects your creditworthiness, based on your credit history and repayment behaviour. Managed by TransUnion CIBIL, this score helps lenders assess the risk of lending to a borrower.

The score ranges from 300 to 900, with higher scores indicating better creditworthiness. Here is a breakdown of the CIBIL score range:

• 300–549: Poor creditworthiness, often leading to loan rejections.
• 550–649: Below average, with limited loan approval chances.
• 650–749: Fair, with moderate approval chances but possibly higher interest rates.
• 750–900: Excellent, offering easy approvals and favourable terms.

Maintaining a score above 750 is ideal for smooth access to credit.

How to check if you currently have a bad CIBIL score and review your report

Knowing your CIBIL score is the first step towards improving it. You can check your score online through authorised platforms like the Bajaj Finserv website or app. Follow these steps to access your CIBIL score:

1. Visit the Bajaj Finserv website or download the app.
2. Log in using your registered mobile number.
3. Navigate to the ‘CIBIL Score’ section.
4. Enter the required details and view your score.

Reviewing your credit report is equally important. It helps identify errors, discrepancies, or fraudulent activities that may negatively impact your score. Addressing these issues promptly can improve your credit health.

A bad CIBIL score in India is typically any score below 650. Financial institutions view borrowers in this range as high-risk, making it challenging to secure loans or credit cards. Here is a breakdown:

• 300–549: Very poor, indicating frequent defaults or overdue payments.
• 550–649: Poor, showing inconsistent repayment history or high credit utilisation.

If your score falls in these ranges, it is essential to take corrective action to improve your creditworthiness.

How bad CIBIL score affects your loan, credit card, and EMI card approval

A bad CIBIL score can significantly impact your financial options. Here is how it affects approvals:

• Loans: Lenders may reject your loan application or offer loans at higher interest rates.
• Credit Cards: Approval is unlikely, and if granted, it may come with a lower credit limit and higher fees.
• EMI Cards: EMI Network Cards, like those offered by Bajaj Finserv, may be declined due to poor credit history.

Lenders scrutinise applications more thoroughly for individuals with bad scores, leading to longer processing times and stricter terms.

Typical good CIBIL scores lenders prefer for loans and credit cards

Financial institutions generally prefer applicants with a CIBIL score of 750 or above. Here are the ideal score ranges for different credit products:

• Personal Loans: 750+
• Home Loans: 700+
• Credit Cards: 750+

Maintaining a good score not only increases approval chances but also ensures favourable terms, such as lower interest rates and higher credit limits.

Good CIBIL score bands for Bajaj Finserv personal loan and other loans

Bajaj Finserv prioritises applicants with a score of 750 or above for seamless loan processing and attractive terms.

Why your CIBIL score becomes bad: common mistakes borrowers make

A variety of financial habits can lead to a bad CIBIL score. Common mistakes include:

• Late Payments: Missing due dates for EMIs or credit card bills.
• High Credit Utilisation: Consistently using more than 30% of your credit limit.
• Multiple Loan Inquiries: Applying for multiple loans or credit cards in a short span.
• Defaulting on Loans: Failing to repay loans entirely.
• Ignoring Credit Report Errors: Overlooking discrepancies in your credit report.

Avoiding these mistakes is crucial for maintaining a healthy credit score.

Can you get a loan for bad CIBIL score and what the options are

Although challenging, it is possible to secure a loan with a bad CIBIL score. Options include:

• Secured Loans: Loans backed by collateral, such as gold or property.
• Guarantor Loans: Loans where a guarantor with a good credit score co-signs.
• NBFC Loans: Non-Banking Financial Companies may offer loans at higher interest rates.

However, these options often come with stricter terms and higher costs.

Bad CIBIL score loan options: secured loans, guarantors, and higher-risk pricing

Here are some viable loan options for individuals with a bad CIBIL score:

• Secured Loans:
  • Gold loans or loans against property.
  • Easier approval due to collateral.
• Guarantor Loans:
  • Requires a co-signer with a strong credit profile.
• Higher-Risk Pricing:
  • Loans with higher interest rates to offset lender risk.

These options can help bridge financial gaps but should be used responsibly.

What is a good CIBIL score for Bajaj Finserv Insta EMI/EMI Network Card

For Bajaj Finserv Insta EMI or EMI Network Cards, a CIBIL score of 750 or above is generally preferred. Benefits of maintaining a good score include:

• Pre-approved offers.
• Higher purchasing limits.
• Flexible repayment tenures.

A good score ensures easier access to these financial products and their associated perks.

Improving your CIBIL score requires consistent effort. Follow these steps:

1. Pay Bills on Time: Set reminders to avoid late payments.
2. Reduce Credit Utilisation: Keep usage below 30% of your credit limit.
3. Avoid Multiple Inquiries: Limit loan or credit card applications.
4. Review Credit Reports: Regularly check for errors and dispute inaccuracies.
5. Clear Outstanding Dues: Settle overdue payments to improve your score.

With disciplined financial habits, you can see improvement within 6–12 months.

How long it can take to move from bad to good CIBIL score

The time required to improve your CIBIL score depends on the severity of the issues:

• Minor Issues: 3–6 months for slight improvements.
• Major Issues: 12–18 months for significant recovery.

Factors like timely repayments and reduced credit utilisation can accelerate the process.

Do’s and don’ts when you have a bad CIBIL score and still need credit

Do’s:

• Seek secured loans.
• Use a guarantor for better approval chances.
• Focus on improving your credit score.

Don’ts:

• Avoid multiple loan applications.
• Do not ignore overdue payments.
• Avoid over-utilising your credit limit.

Responsible borrowing is key to financial recovery.

How Bajaj Finserv evaluates CIBIL score along with income and other eligibility factors

Bajaj Finserv considers multiple factors for loan approval, including:

• CIBIL Score: A score of 750+ is preferred.
• Income: Stable income ensures repayment capability.
• Debt-to-Income Ratio: Lower ratios are favourable.

Strengthening these aspects can enhance your eligibility.

What to do if a Bajaj Finserv loan or EMI card is declined due to bad CIBIL score

If your application is declined:

1. Review the reasons for rejection.
2. Focus on improving your CIBIL score.
3. Reapply after addressing the issues.

Bajaj Finserv offers tools and resources to help you monitor and improve your credit health.