The launch of India’s first credit score for individuals, the Cibil TransUnion Score, is one of the land mark achievements made in our country till date. This report will ensure transparency among borrowers and lending institution.
Most lending institutions prefer to lend to only those borrowers whose credit standing is more than 800 on a total of 1000 points. So if you want to know if your loan application is going to be processed, get your own credit report at least 6 months prior to your loan requirement. Doing so, you will be in a position to improve your credibility for your loan application to be considered.
However, even if your score is well over 800, your loan application may not be processed, since banks consider a few more options to decide to lend to the borrower or not. Your total income, overall debt burden and how you fit into their internal credit policy of the bank are some of the options the bank considers before deciding upon your loan application. Hence, if your EMI to income ratio is over the set cut-off percentage, your loan application may get rejected despite having a credit score of 847.
This criterion of evaluating a borrower is adopted by all banks for all loans; be it a personal loan, car loan, home loan etc. So, make sure you have all the options checked before you decide on your financial requirements and decide on your loan amount.