CIBIL Score -1
What is CIBIL Score 0 or -1?
If you have no (or little) previous borrowing history, and no track record on which to determine credit-worthiness, CIBIL will assign you scores of 0 or -1 respectively:
- CIBIL score 0 means that information about the borrower’s credit history is available for only up to a period of less than 6 months in total. Also known as “NA” or “not applicable”.
- CIBIL score - 1 means that no information about the borrower’s credit history whatsoever. There is no information to report, hence this score is also known as “NH” or “no history”.
The Credit Information Bureau of India Limited (CIBIL), is on its way to introducing a new scoring system called CIBIL TransUnion.
Under this new scoring system, scores will range from 1 to 5, with 1 representing highest likelihood of default and 5 representing lowest likelihood of default. This new system will provide credit scores for new borrowers after taking into consideration information on factors like:
- Type of loan (secured or unsecured).
- Older requests for credit (volume of loan requests).
- Up to 3 months over-due for any past loan.
- Demographic information like age, location, income, etc.
These factors will determine your score as a number between 1 to 5, and here’s why some people have reported their CIBIL TransUnion score as 0 or -1.
Although this basically isn’t a bad position that you have gotten yourself into, most banks and NBFC lenders will only lend to those who they feel can pay them back. A score of 0 or -1 could mean that you won’t get a loan, but some good banks and NBFC lenders are looking at credit appraisals, income proofs, employer and employment details etc. and still lending despite 0 or -1 CIBIL score.
Other credit information agencies in India are also adopting a credit rating system for potential borrowers who have less than 6 months of credit history. Equifax, for example, is issuing scores ranging from 300 – 900 similar to the scores for those with satisfactory credit history. Experian has a scale of 1 – 6 which is used to rate borrowers with less than 6 months of credit history with 1 being the riskiest and 6 being the least risky in terms of defaulting on loans.
How to Get a Loan Despite Having a CIBIL Score of 0 or -1?
You can just talk to the bank and explain how and why you are an eligible candidate who is stuck in the unfortunate position of having a lack of credit history, and get the ball rolling. Submit income proofs, a letter from your employer, etc. and convince the bank that the CIBIL score of 0 or -1 is an inaccurate representation of your credit-worthiness.
Once you’ve secured your new loan, paying it off correctly will result in your score being raised and positive remarks in your CIBIL TransUnion credit report. You must make each and every EMI payment on time, this will not only save you from penalties and fines, but will also go a long way in improving your credit rating. It says that the first loan you took was successfully repaid in full and on the same terms on which you took the loan (try not to foreclose or arrive at a “settlement” with your bank).
Your loan repayment details and remarks from the bank will be present in your new CIBIL TransUnion credit report.
Most banks today are using these scores to determine credit-worthiness for borrowers will less than 6 months of borrowing history and/or no credit history at all.
How to Boost CIBIL Credit Score?
Your CIBIL credit score will determine whether or not you are approved for a credit card or loan. Your past loan applications and payment patterns are a part of your CIBIL credit history. Some methods to raise your CIBIL credit score are listed below:
Regularly check your CIBIL credit report:
Checking your CIBIL credit report on a regular basis is a good idea because it gives you two things that are crucial to your credit score.
- The credit card or loan that has lowered your CIBIL credit score due to defaults or late payments.
- The information included in the CIBIL credit report helps in enhancing your credit score. This is because in case there are any issues like defaults or late payments, you can get them resolved by getting in touch with the bank and CIBIL.
Make timely loan repayments:
Building your CIBIL credit score requires you to make sure you pay off all of your credit card debt and loans on time and consistently. You will get a lower credit score if you miss payments.
Avoid applying for multiple loans:
If you apply for multiple credit cards or loans, it gives the impression that you are in need of credit because you are unable to manage your finances with your income.
CIBIL Related Articles
- How CIBIL is Important
- Resolve CIBIL Errors
- CIBIL Xpress Acquire
- Terms and Conditions
- CIBIL score calculation
- CIBIL TransUnion Score 2.0
- Tips for good CIBIL Score
- Mistakes That can negatively impact your CIBIL Score
- How to Improve CIBIL Score
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FAQs on CIBIL Score -1
- What does a 0 /- 1 CIBIL score mean?
CIBIL score showing 0 or -1 means either the borrower' credit history is available for less than six months or no information is available about the borrower's credit history, respectively. CIBIL score '0' is also the same as 'NA' (Not Applicable).
- What are the benefits of the new CIBIL Score?
A new scoring system improves the precision of creditworthiness and enables borrowers to get a rate within six months.
- Why did my CIBIL score drop?
Your CIBIL score has dropped due to the change in the scoring algorithm and not due to the credit history. This will not impact the possibility of approval of the loan application of the candidate.
- Will a new score change my loan eligibility?
No, the new scoring system will not impact your loan eligibility as the lender's final decision to provide a loan is based on its credit policy. Due to the change in the numeric value of the score the banks have also tweaked their policies, thereby not impacting the customer's loan eligibility.
- Do I need to apply for a new CIBIL Score?
No, you do not need to apply for a new CIBIL score as this gets updated automatically. free Annual Credit Report will also show a new CIBIL Score and log in to view the dashboard for the score.
- Is there any choice to choose a new or old version of the CIBIL score?
No, you cannot choose between the new or old version of the CIBIL score as this is an algorithm update and the option of choosing the rating system is provided.
- How do I improve my score under the new CIBIL rating system?
To improve credit score, avoid late payments; keep credit utilization as low as possible; keep a mix of secured and nonsecure loans for healthy credit; avoid multiple loan queries; review the score regularly; and keep a check on the credit habits of guarantors, joint accountholder, or the co-signers.
- Why did I not receive an alert to mark the change in the CIBIL score?
If there is a change in CIBIL score due to an internal evaluation process other than late payment or due to a new credit application, then you will not receive a notification alert.
- Why is my new CIBIL Score different from my old CIBIL Score?
The new and old CIBIL score range remains the same and is market between 300 to 900. Due to revision in the scoring algorithm, the numeric value generated for the new scoring system is different from that of the old system. The new system calculates the score based on 36 months of credit history and scores customers for a duration of less than six months of credit history, which is completely different from the old scoring system.
CIBIL Score Requirements for Loans
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