Having a bike of your own is a dream possessed by many. Especially in a country like India with its narrow lanes, unending traffic, and long queues, a bike is considered a must-have in most metropolitan cities and the rural areas too. It gets you from one place to another in the fastest way possible, and plus, you cannot deny the adrenaline rush that a bike ride can give you.
Naturally, with an increase in the demand for bikes, bike loans have also become increasingly common today. Whether it’s loaning from a bank or an automobile dealer, you can now get the bike or scooter of your choice through easy monthly installments. The process to acquire a loan is also pretty simple. You have to meet the particular criteria of the institution you are borrowing money from. One of those criteria being something known as a CIBIL score.
Now, what is the CIBIL score, and how relevant is it to your bike loan application? Let’s find out.
What is CIBIL?
First off, let’s know what the term CIBIL actually means. CIBIL stands for Credit Information Bureau India Limited. It is an Indian organization that maintains and retains all documents and records of individuals and companies. These records are specific to credit-related transactions and activities, including credit cards and loans.
Registered member banks and other financial institutions periodically submit the information and data they possess to CIBIL. Based on this information, CIBIL issues something known as a CIR (Credit Information Report) along with a score (CIBIL score) to the applicants. This enables the banks and lenders to swiftly filter the multitudes of loan applications they receive day in, day out.
What is a CIBIL score?
As stated above, a CIBIL score is a credit score that is accorded every year to individuals by CIBIL. The score is a three-digit numeric figure that determines the creditworthiness of an individual. It is a summary and representation of the individual’s credit ratings, history, and ultimately, their credit profile. CIBIL arrives at this number after a detailed consideration of the said individual’s past behavior with credit, loans, and repayments.
The score ranges from 300 to 900 – with 300 being the least and 900 being the highest. Undoubtedly, the closer your credit score is to the 900 mark, the higher the chances of your loan application being approved.
What is the ideal CIBIL score for a bike loan?
Now that you know what a CIBIL score is, let’s get straight to the point – bike loans. When applying for a bike loan, you must understand that different banks will have their own criteria concerning the CIBIL score. And while there is no fixed score as such, there is, however, an ideal score range for a bike loan. If your credit score is in the range of 600 to 750 or higher, you’ll find it easier to avail of a loan for your bike from most banks and institutions.
How can I find out my CIBIL score?
Finding your score is pretty easy, and thanks to the powers of technology, you can now know your CIBIL score online with a few clicks of a button. All you have to do is visit https://www.cibil.com/ aka, the CIBIL website. Click on the “get your CIBIL score”option. You will now be requested to share a couple of details that include – your name, email id, password, ID proof, pin code, date of birth, and mobile number. Afterwhich, you will receive an OTP on your cell phone. Enter the OTP, and you’ll be redirected to a website called myscore.cibil.com. And voila! You will be able to view your CIBIL score here. Now, wasn’t that easy and convenient?
Tips to have an ideal CIBIL score
If you’re wondering about ways to improve or maintain a good CIBIL score, then look no further. We have curated some helpful tips just for you:
- Financial Discipline: Just like how we strive to be disciplined in other aspects of life, financial discipline is also equally important. Pay your credit card dues and loan repayments on time because these tend to have the most impact on your credit score. Late payments are a big NO in the credit industry.
- Control Your Credits: Keep your credit utilization low, ideally around the 30% mark. When applying for new credit, keep it in moderation and try not to go overboard with your spending.
- Keep A Healthy Mix: This refers to keeping a healthy mix of a variety of credits. A good balance between your secured (such as home loan, car loan) and unsecured (such as personal loan, credit card) loans is essential if you wish to maintain a high CIBIL score.
- Regular Reviews: And lastly, keep checking your CIBIL score regularly through the year. This not only avoids any last-minute shocks as well as helps you navigate and get your finances back on track should there be any need for such.
It goes without saying that having an ideal CIBIL score is crucial. A low CIBIL score can result in your loan application being rejected. Even if it does pass, you could be subject to a high-interest rate or more down payment. On the other hand, a good score can make things a lot easier in life. In the short term, your loan applications get processed quickly. But in the long run, a good CIBIL score positively influences your future credit. You can even negotiate on your interest rates if you have a high score to back you up!
We hope this article has been helpful and acquainted you with everything you need to know about the CIBIL score. Here’s wishing you good luck with the bike loan and some beautiful adventures on your new bike!
Also read: Are Motorcycle Loans Hard To Get?