To check CIBIL score before applying for a business loan, you can simply visit the website of the CIBIL. Checking CIBIL score is an important step before applying for a business loan. Most lenders cite a high CIBIL score important eligibility criteria. In this blog, we shall discuss what a CIBIL score is and how to check it online and offline.
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What is a Business Loan?
Also Read: How to Improve CIBIL Score for a Small Business Loan?
A business loan is credit facility offered by the financial institutions in India. A businessman requiring additional funds for his business can avail a business loan from banks, NBFCs, and online lending companies. A business loan can be used to meet the working capital requirements or to buy upgraded machinery or equipment.
A business loan is majorly of two types, a secured business loan or an unsecured business loan. A secured loan is backed by a collateral and is also called a collateral loan. Whereas an unsecured business loan is not backed by the collateral and is also called a collateral-free loan. The other types of business loans include machinery loan, working capital loan, SME loan, MSME loan, term loan, flexi loan, and capital loan.
What is a CIBIL Score?
Also Read: MSME Loan in 59 Minutes: How to Avail it?
A CIBIL score is a three digit number ranging between 300 and 900. This number implies the creditworthiness of the borrower. The CIBIL report includes the loan repayment history, bank balance and statement, credit card usage, cheque bouncing instances, and other instances that depict your behaviour with money. It also includes the number of times you have applied for a loan.
The loan lenders check CIBIL score of the borrower before approving the business loan ensure that they are granting loan to the right borrower and their cash is in the safe hands. No lender, for obvious reasons, wants to risk their money. So, they check CIBIL score.
What is the Importance of CIBIL Score?
Also Read: How to Qualify for a Business Loan in 3 Steps?
CIBIL score is checked by the lender before granting loan and therefore, it is important to check CIBIL score before applying for a loan for business. A CIBIL score conveys the following things to the lender:
- Loan seeker’s credit history.
- If loan seeker qualifies for the loan or not.
- To measure the risk of granting a business loan.
- To determine the business loan amount and the interest rate for it.
How to check CIBIL Score?
Also Read: How to get a Business Loan?
A credit information company, Transunion CIBIL tracks and records the business loan repayment history of an individual in India. As conveyed earlier, it is a 3-digit number (300-900) which is used by the banks and NBFCs in India to check the eligibility of the borrower in order to ascertain his creditworthiness.
Follow the following steps to check CIBIL score:
- Initiate the check CIBIL score process by filing a form on the CIBIL’s official website.
- Enter all your personal details, such as name, contact number, and address.
- You need to pay the nominal fee if you want to check your CIR (Credit Information Report) with the CIBIL Transunion.
- After submitting the form and making the payment, your CIBIL score report will be mailed to your email.
In addition to the online process, you can also check your CIBIL offline. All you have to do is post CIBIL your documents and a demand draft for the fee to CIBIL Mumbai office.
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