CIBIL Transunion Score – Keep it above 800 for Easier Loan Approvals

What is CIBIL TransUnion Score?

The CIBIL TransUnion score is going to radically change the way an individual’s credit history is verified and validated by most lenders for the credit approval and disbursal process.   CIBIL (Credit Information Bureau of India) which is almost 7 years into operation now is India’s first credit information agency that provides credit related information to lenders on individuals and institutions across India.   Checking the CIBIL credit score for potential borrowers has now more or less become a common norm with most big and small lenders.

To provide a brief explanation what exactly is a CIBIL TransUnion Score, it’s basically an indicative score provided by CIBIL TransUnion on potential borrowers based on their past credit history that can predict the possibility of the customer defaulting on the loan should the lender choose to sanction the loan.   The CIBIL TransUnion Score model claims to almost accurately predict the likelihood or probability of the borrower defaulting on the loan based on how well the individual has fared in terms of his or her credit usage, behavior and pattern in the past.

What Exactly Does the CIBIL TransUnion Score Show?

Here’s an indicative graph sourced from the TransUnion website that shows the delinquency rate against the respective credit scores.What is CIBIL Transunion Score

The chart shows the delinquency rate or loan defaulting rate to decrease at scores above 750 while the probability of default keeps increasing with lower credit scores.  TransUnion on it’s website claims to have developed this model based on years of expertise in the data analytics field and has built this model after extensive testing and analysis of a considerable amount of sample/test data.

What Does This Mean to a New or an Existing Borrower?

The single biggest factor that new or existing borrowers need to realize is that credit history and score has and will become one of the single most important factor when you approach any financial entity for credit.  Borrowers can no longer chose to hide facts regarding their prior credit history because banks now have easy access to individual credit information and every borrower (new or old) should keep in mind the importance of maintaining a healthy credit score.

What Must Individuals Do To Maintain a Healthy Credit Score?

While we don’t know how exactly TransUnion’s scoring model works and what parameters do they consider to arrive at an individuals credit rating, if we go by logic and apply common sense a good credit score is always a byproduct of effective credit utilization and management.  Some of the major pointers that individuals need to consider to maintain a healthy credit history are:-

  • Paying credit card bills on time.  Avoid payment of minimum due as much as possible.   This is one of the most difficult aspects to follow and majority of the credit related issues arise out of rampant and uncontrolled credit card spending.  Impulsive shoppers please note.
  • Avoid cheque bounces.
  • Avoid taking unnecessary adhoc loans which might eventually become difficult to service later.
  • When we say adhoc loans these are basically pre-approved or spot loans which individuals accept based on certain mental calculations and later on realizing it was a tight call.
  • If you have got into a dispute with any financial entity, ensure the dispute is amicably resolved.   One of the first thing that happens when you run into a dispute with a financial entity is the mention of your name in the CIBIL database.   More often than note even after the dispute is resolved, the same financial institutions fail to take off the name from the CIBIL database.
  • Individuals who have possibly run into disputes big or small with any financial entity are strongly advised to check their CIBIL report to verify the facts and get the same corrected.

Can Individuals have Access to CIBIL TransUnion Score?

Yes the CIBIL TransUnion Score is now accessible to individuals as well.  You can check for more details as well as apply for a CIBIL report online by visiting here.

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About Sibi Uralath

Sibi Uralath is a content manager, blogger and writer by profession [not the kind who writes novels, books or poems]. When he's not working, he's usually biking away to glory. Connect with him on Twitter

Comments

  1. pLEASE CONFIRM TIME UPDATE CIBIL SCORE 617 TO 800

  2. amitesh kumar says:

    I had taken home loan for house from IDBI bank. After paying the EMIs for 18 months (50% loan was disbursed )I came to know that land over which half the construction was done was under litigation. The civil case is still underway since lower court has put Stay on further construction. I stopped the EMIs thereafter. I waited for 18 more months for case to be settled. It is still underway. Now I want to take another home loan and my CIBIL rating score has been spoiled by the bank who are at fault themselves since they were responsible for the correctness of the papers before inducing me for loan. . How to get new home loan. Is there anybody whom I can talk to explain. Repaying capacity is not a problem as I am Grade I goverment officer. Apart from that I ve using credit card or last six years impeccably.

    • Hi Amitesh,

      Thanks for visiting and taking time to comment. Litigation’s are known to be notorious for the inordinate amount of time it takes for closure. The bank has gone ahead and reported your case to CIBIL simply because you stopped paying them the EMI. And yes, the bank should have done a proper due diligence before sanctioning the loan. We strongly suggest you consult a legal expert in your locality. If it is indeed determined, based on the nature of the ongoing litigation, that the bank is at fault, you can always raise a dispute request with CIBIL. You can find more information here http://www.cibil.com/faq/dispute-consumer

  3. REETA says:

    SIR,
    I GOT A MAIL OF PRE APPROVED PERSONAL LOAN OFFER FOR Rs 1,38,000/- BUT 2 DAYS LATER I WAS INFORMED THAT MY CIBIL SCORE IS POOR.HOW TO IMPROVE MY CIBIL SCORE ABOVE 550

  4. P Sivaprasad says:

    Hi,

    Currently my CIBIL score is 610. Recently I have applied for credit card from Amex. I was shocked to see that, the same got rejected stating that, there is some problem in my CIBIL report. As per my CIBIL report, the score is 610 and I have found one Credit card of SBI which I have cancelled without even swiping for once, showing an outstanding of Rs. 11,000/- and which is said to be waived off. I remember, this card I have taken in 2007 and SBI Life who are tied up with SBI Card has debited some amount from my card towards insurance. This is all without my knowledge and consent, the SBI has debited to my card. In the same year, I have sent so many mails to SBI Card department and also paid Rs. 500 towards the outstnaidng as advised by the SBI Card executive.

    Now, please advise me what to do in this condition.

    By god’s grace, so far I have not defaulted to any of my existing credit cards (Including another SBI Card) and Loans.

    Regards,

    P Sivaprasad

  5. haneefa u v says:

    dear sir i had an accident i fell from 3rd floor and broken my l-1 back bone after a long hospital treatment and operation ,i was operated , steel rods and screws were fixed in back so the l-1 could not be damaged , in this period i didnt manage to pay my creditcards payments in right time,but however i settled all the creditcard dues wherin the overdues interst and penality was vaved and the balance amount was settled , but now i understood about settlement charater, my cibil score is 667, if i pay the balance penality amount now does it help to improve my cibil score or its waste of time and money

  6. Jitendra Saha says:

    dear sir, I had taken a student loan from citi bank, loan amount 1 lakh 17 thousand on year 2000, paid for a year and then become defaulter due to not having job.Currently the loan amount is gone up to 6 lakh and on calling bank they are telling the loan had been closed but at CIBIL its showing overdue of 6 lakh. How to proceed for better result as now I need to take a home loan.

  7. sanjay singh says:

    Hi,
    I had a bike loan, and financer submit few cheques late and my cheques were bounced, so i paid the amount by cash but i didnt paid the late fine charge because it was not my fault. Now due to this my cibil score is 550. What Should i need to do?

    Regards,
    Sanjay

  8. Raj Kumar says:

    My loan was rejected. Credit Sudhaar was my choice. Initially they were slow. But their counsellors were able to handle all my queries. I will give Credit Sudhaar a positive review

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