Easily Monitor Your Cibil Score: Get Your Online Credit Pass Today

Credit Score: What Is It?

A credit score, also known as a CIBIL score, is a three-digit figure that indicates how successfully you have handled credit in the past, such as a home loan, personal loan, or credit cards. It is basically a measurement of your borrowing capacity and is based on how you have used credit in the past.

Simply put, your credit score informs lenders about your reliability as a borrower, your chance of defaulting on new loans, and other factors. Lender bank or NBFC closely examines your credit report and credit history that is maintained in your credit report when you apply for any type of loan or credit card.

Out of 900 points, your credit score is determined. The greater your credit score, the more probable it is that creditors will grant you fresh credit. Typically, lenders prefer borrowers with credit scores of 750 or above when considering them for any type of loan or credit card.

In exchange for loans or other forms of debt obtained from banks, NBFCs, institutions, or institutional investors, credit ratings are often given to businesses. The capacity of the borrower to pay back the money and the interest is shown by the borrower’s credit rating. Based on the company’s historical loan and interest repayment patterns, a high credit rating is awarded.

Both individual and institutional investors can predict how risky an investment will be since credit ratings are frequently expressed as symbols. The highest credit grade, AAA or A1, denotes principal and interest repayment security. D is the lowest possible grade.

The distinction between a CIBIL score, a credit report, and a credit rating

Credit is essential whether you are an individual or a corporation. Individuals need credit to achieve financial goals such as purchasing a home, a car, or starting a business. Credit is also vital for business owners since they invest the loan amount in infrastructure to expand the business. People borrow money from banks and other financial institutions. Banks, as well as institutions or institutional investors, make loans to businesses.

Businesses sell debt products to investors such as bonds, fixed deposits, and non-convertible debentures at a fixed interest rate or coupon rate. The interest or coupon rate is determined by the current interest rate offered by banks and other financial organisations, but it is usually slightly higher. Individuals and businesses are both consumers of banks these days. They provide loans to both categories at varied interest rates based on the type of loan requested.

While this is the principal source of income for banks, how can they examine the backgrounds of individuals or business owners to determine whether their loans will be repaid on time?

When it comes to business loans from individuals and business owners, lenders are concerned about whether the businesses will return the interest and principal on bonds and other fixed income instruments. Because bank speculation is costly, CIBIL (Credit Information Bureau India Limited) was founded to give a credible source of information on loan repayments and credit card payments.

What is the relationship between CIBIL score, credit report, and credit rating?

While the information offered by the CIBIL score, credit report, and credit rating may differ, they all serve the same purpose: they are credible sources of data about the borrower’s creditworthiness.

The CIBIL score is a component of the credit report that displays both individual and corporate interest and principal repayment. When it comes to debt instruments such as bonds and debentures issued by firms, credit rating also gives information about the likelihood of safety of your principle and interest.

The significance of the CIBIL score, credit report, and credit rating

The CIBIL score, credit report, and credit rating are all very important in the credit business.

Individuals apply to banks for home loans, vehicle loans, and personal loans. Businesses seek bank loans to expand their operations. Banks would be taking a risk every time they approved a loan without a CIBIL score and credit report. If most bank loans turn out to be faulty or suspect, the bank will suffer a loss. Businesses sell numerous debt products to consumers and institutional investors to raise capital for expansion. They pay a coupon or interest to individuals or institutions in the same way as they pay interest to banks when they make loans.

Process to apply for credit pass

Step 1: Sign up for the Credit Pass by clicking the Sign-up button at the top of this page.
Step 2: Provide your basic information, such as your name and phone number.
Step 3: Confirm your identity using an OTP delivered to your cell phone.
Step 4: You will be redirected to the payment page where you will have to finish the payment for the Pass
Step 5: Pay a small payment of Rs. 99 to purchase your Credit Pass

You may now access your Credit Pass account. See your Credit Pass dashboard, your credit score, and your report. Your Pass has a one-year validity period.

Conclusion

The Bajaj Finserv Credit Pass can assist clients in making better financial decisions and managing their finances more effectively. Customers can enhance their credit ratings by routinely monitoring their credit scores and identifying any changes or inaccuracies that may influence their creditworthiness. Consumers can also take advantage of pre-approved loan offers to gain quick and easy access to finances.