When one thinks of availing a business loan or personal loan, CIBIL score and CIBIL report are the common words one hears from the lenders. Banks and loan lenders ask for both of them before processing the loan application. CIBIL score and report are two essential aspects of an individual’s credit history.
If the borrower does not have a good score, there are high chances that his loan application will be denied. Said that, it also sometimes happens that the borrower gets confused between the CIBIL report and score and take them for same. Whereas, in reality, both are different. In this blog, we have discussed the difference between the two.
CIBIL Report
It is a detailed report of your credit history. It includes information such as personal and contact details, professional details, previously availed loans, repayment history, details of credit, etc. Notably, it also consists of the features of the criminal history of the individual. The CIBIL report provides insight into the borrower’s financial habits as well as character.
CIBIL Score
And when we talk about CIBIL score, it is a 3-digit summary of the CIBIL report. One can say that it is a numerical representation of the CIBIL report. It tells about the previously availed loans and their repayment history. It helps the lender to know the business loan eligibility and if he would be able to repay the loan.
One can conclude that there is a difference between the CIBIL score and report. But one point that is worth mentioning here is both play a very critical role while getting the loan application sanctioned. Before availing the loan application, both banks and NBFCs consider them. Notably, the credit companies (such as TransUnion) can create score only when the credit history of more than six months is available. And if an individual does not have any credit history, his report shows NA (Not Applicable).
Generally, individuals who pay their EMIs on time have a good score. The other important points to improve the CIBIL score is to maintain the credit utilisation ratio below 30% and pay all bills on time. The credit score is between 300 and 900, and a score of more than 700 is said to be a good score. An individual can check CIBIL score by PAN card online. Also, loan lenders provide business loans at low interest rates to individuals with a high score since the risk is low.
If you have a business of more than two years with a turnover of Rs. 10 lakhs or more, you can avail a business loan from ZipLoan. In addition to the CIBIL score, ZipLoan also has its credit evaluation process called ZipScore. It takes into consideration business vintage, business turnover, and revenue generated to process the loan application. Additionally, it offers unsecured business loans and disburses the loan amount in just three days.
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