The CIBIL Score ranges from 300 to 900 and the higher your score, the better your ability to get a loan.
GOOD CIBIL SCORE FOR CAR LOAN
You know it is time to buy a new vehicle, but you have one thing holding you back, your CREDIT SCORE. However, you are not sure for what credit score is required to buy a car. There is no fixed minimum score for getting a loan. In general, it is advisable to have a score of 750 or above to stand a good chance of being approved. The CIBIL Score ranges from 300 to 900 and the higher your score, the better your ability to get a loan.
Can I get a loan without a CIBIL Score?
Yes, you can get a loan without a CIBIL Score but it is a longer and more difficult loan-approval process. Moreover, you might be offered unattractive terms and conditions on your loan such as a higher interest rate or shorter repayment period. However, with a good CIBIL Score, you can get a lower interest rate, longer repayment period, larger loan amount and simpler documentation.
If you have a poor credit score, it is still possible to avail of a car loan as the banks hold the car as security collateral until you repay the full loan amount with interest.
How can I avoid a bad CIBIL Score?
A bad CIBIL Score arises for the following reasons:
- Late or missed payments: If you make any delay in payments towards either credit cards or loans, it causes a negative effect on your CIBIL Score.
- Exceeding credit limit: Using up the whole credit limit that is provided to you is a sign that you are not disciplined about spending. Make sure that you do not use more than 50% of your total credit limit. This will have a positive impact on your score.
- Rejected loans: If your loan has been rejected, do not apply for another loan immediately, because there is a high chance that the second loan will be rejected as well. Each loan rejection causes a drop in your credit score. Improve your credit score first until you are loan-eligible, and then apply for the loan again.
While there is no fixed minimum CIBIL score to apply for an auto loan, it is recommended that you ensure that you have a score of at least 750 before you apply to avoid potential rejection.
If you want to improve your credit score and become loan-eligible, you could approach a professional credit management company, like CreditMantri, to help guide you on the most efficient way to achieve your credit goal. Take steps right away to improve your score so that you qualify for the best loan offers, and have life-long fast and hassle-free access to credit in the future as well.