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CIBIL™ score helps banks and other financial institutions to evaluate your creditworthiness and risk assessment to assess your chances of likely default on potential loan payments, based on your past loan/credit card account information. CIBIL™ score of 700 is termed good whereas a score of above 750 is deemed excellent, giving you higher chances of getting a loan/credit card approved.

Having a good CIBIL™ score gives you the confidence to plan your future loans. Consider this scenario. You apply for a loan based on your high CIBIL™ score and submit it to the bank for consideration. Still, the bank informs you that your loan application has been rejected.

You are confused as to what could go wrong with despite having a good CIBIL™ score?

What could have gone wrong?

CIBIL™ score, though highly relevant for evaluating the creditworthiness of a borrower and a key criterion considered by banks for approving potential loans or credit cards, is not the only thing that banks and financial institutions look at in the overall lending process. Other key considerations include:

CIBIL™ Report Remarks

CIBIL ™ report is a comprehensive credit report which contains your CIBIL ™ credit score information and other related remarks and comments by lenders. You may have opted for any other loan settlement terms to settle your loan with your bank or financial institution. When you settle a loan you pay a lower amount than all EMIs combined than specified in the original loan agreement. Such a detour from the original loan terms gets recorded as a remark like settled/written off in the CIBIL ™ Report, which could actually adversely impact your chances of getting a loan approved

Guarantor for a loan defaulted

If you have been a guarantor for a loan that gets ultimately defaulted, then will adversely impact your credit report and CIBIL™ score, leading to lenders rejecting your loan application.

You have previous defaulted on loan payments

Banks and financial institutions contain the list of defaulted individuals and maintain their details like name, age, address, current employment etc. In some cases, it so happens that your details could advertently or inadvertently match with a previous loan defaulter. This could have an adverse impact on your CIBIL ™ score hampering your chances of getting a loan sanctioned.

Debt Overburden 

If you are already paying multiple loans from your declared income, then banks may not consider your loan application. Banks will consider another loan on your part as you being overleveraged with your debt-to-income ratio showing an unfavourable status, risking your chances of default on the new loan.

Past Inadequacy in Payment of Income Tax

Banks and other lenders prefer loan applications of those individuals who have been consistently filing their income tax returns for at least two years before applying for such a loan. Lenders evaluate the creditworthiness of borrowers based on their income tax returns also apart from the CIBIL™ credit report to look out for any risk factors.

Multiple Loans

During the previous year, if you have gone in for multiple loans, then irrespective of your regular payment of such loans, lenders do not give preference to such borrowers. Even though you have a clean credit history, still you will be deemed as the high-risk category with your default option high, due to your multiple loans. So, your chances of getting a loan rejected in such a scenario are high even with a good CIBIL™ score.

An unhealthy mix of Secured vs Unsecured Loans

Secured loans are collateral-based loans that are considered less risky by lenders whereas unsecured loans being of a collateral-free nature are considered riskier. If your mix of loans is tilted more towards the unsecured loan category over secured loans, then lenders may reject your new loan application as they consider you a high-risk category in spite of you having a good CIBIL ™ score. So, the right option for you would be to go for more secured loans over unsecured loans, to improve your chances of getting a new loan approved by lenders.

Additional Reading: Secured Loan And Unsecured Loan In India

Frequent enquiries

If while applying for multiple loans or the same loan with various lenders, then CIBIL™ considers you as a frequent inquirer. In such a case, though you have a good CIBIL™ score, still your loan application has greater chances of not getting approved/

The above reasons show that even with a good CIBIL™ score, your application for a new loan could still get rejected by lenders. So, one should manage their financial planning in a diligent and disciplined manner. You should also check your good CIBIL ™ report at least twice a year to ensure that all facts are accurate.

To check your latest credit score for free consider Credit Mantri – the online loan analysis platform, where your credit score is revealed in minutes.


1. What are the top reasons for loan rejection even with a good CIBIL™ score?

The following are the top reasons for loan rejection even with a good CIBIL™ score:

  • Frequently applying and borrowing credit.
  • The comments on the CIBIL™ report.
  • Unstable career or salary
  • Information matching the defaulter’s details
  • Tax payment history
  • History of previous loan and credit card rejections.
  • Poor CIBIL record of Co-applicant
  • Multiple hard inquiries
  • Failure to furnish and submit complete financial details
  • If the age of the applicant is approaching retirement

2. What is the impact of loan rejection on the CIBIL™ score?

When you apply for a loan, the lender makes a credit inquiry that is known as a hard inquiry. This affects your CIBIL™ score. So, you need to be careful while applying for a loan. A loan refusal will lead to a dip in your credit score. You must find out the reason for loan rejection so that you do not commit the same mistake in the future. Some of the reasons for loan rejection are having multiple loan accounts in your name, defaulting on loan payments, acting as co-applicant or guarantor in a loan, less reputed employers, and incidents of late salary credit.

3. What is the time taken to receive a credit report?

The online credit report is delivered instantly after you make the payment.

4. What are the reasons for loan rejection?

The 6 common reasons for personal loan rejection are:

  • Low credit score: Post applying for a personal loan, the lender will check your credit history.
  • Low-Income
  • Inaccurate information in the application
  • Unstable job
  • Several pending loans
  • Not satisfying the eligibility criteria

5. How can I increase my CIBIL™ score?

The following are some of the ways to increase your CIBIL™ score:

  • Pay off your outstanding balance
  • Keep your credit utilization ratio below 30%
  • Pay your bills on time
  • Dispute errors on your credit report
  • Set up a credit monitoring account
  • Open a secure credit card
  • Don't keep applying for credit if rejected
  • Keep the frequency of applications low


The 4 credit bureaus- CIBIL™, Equifax, Experian, and CRIF Highmark offer credit scores in India. The points mentioned above are true for credit scores from any bureau, not just CIBIL™.

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Loan Rejected Even With Good Cibil™ Score Possible Reasons - Customer Reviews

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