Effects of PAN Card on CIBIL Score

CIBIL Score plays a very important role when you apply for a loan or credit card. This score is a proof of your financial credibility. The credit report that tells you your credit or CIBIL score contains your credit history. It informs banks and financial institutions about how you deal with your finances and if you are someone who is worthy of receiving credit or not.

Banks and financial institutions check this score while considering loan or credit card applications. If you have a low CIBIL score, then they may reject your application or charge you a higher rate of interest, but if you have a good CIBIL score, then they may accept your application easily.

What is the Effects of PAN on CIBIL Score:

A Permanent Account Number or PAN is different from CIBIL Score. While CIBIL Score is your credit score, PAN is a unique alpha-numeric identification number issued to Indian nationals. PAN is important because it helps in preventing tax evasion and acts as proof of identity. Because PAN is a unique number, two people cannot have the same PAN. As per Section 139A(7), one person can have only one Permanent Account Number. Even if you lose your PAN card, you can get a duplicate one with the same number.

So, if you change your PAN card or number, then your CIBIL score will not be affected. Credit score has other details such as your date of birth, banking transactions, residential address, etc. So, in case your PAN is changed, then the CIBIL software will mostly show a warning in your account. People are advised not to change their Permanent Account Number to improve their credit score. If they want to improve their CIBIL score, they can do it through other ways.

Tips to Improve CIBIL Score:

You can follow the tips mentioned below to improve your CIBIL Score:

  • Make your credit card or loan instalment payments on time.
  • Do not apply for too many loans or credit cards.
  • Do not use the full limit of your credit card.
  • Check your credit report regularly and if you find any mistakes, rectify them immediately.
  • Clear all the outstanding payments.
  • Use your oldest credit card. If you have a credit card for a long time with positive repayment history, then it will have a positive impact on your CIBIL score.

Impact of PAN and Aadhaar on CIBIL

CIBIL score plays a significant role when you plan to apply for a loan or credit card. The credit score ranges from 350-800 and based on the score the application gets processed. The higher credit score brings down the interest amount, while on the other hand the lower credit score increases the interest amount drastically. To take an informed decision you should avail the free CIBIL score from different credit bureaus at regular intervals.

Issued by the Income Tax Department the PAN card contains 10-digit number, whereas the Aadhaar number is generated by UIDAI and has 12-digit unique numbers.

Recently, the government of India has made it mandatory to link Aadhaar number to PAN card to file tax returns. Anyone not abiding by it will be face the consequences of rejected ITR by the Income Tax Department. As per the Central Board of Direct Taxes (CBDT) the last date to link Aadhaar and PAN card is March 31, 2018.

Both Aadhaar and CIBIL score are important for an individual as it builds a unique identity of an individual.

Benefits of Linking PAN and Aadhaar on CIBIL

Linking PAN and Aadhaar is mandatory and can have positive impact on the CIBIL score. An individual can link Aahdaar and PAN either by logging into the e-filing portal or by using SMS mode. Mentioned below are some of the benefits.

  • Linking PAN and Aadhaar prohibit multiple people to use the same PAN number that results in generating the wrong credit report of individuals. It may turn negative for an individual who has never applied for a loan or a credit card.
  • For logging into any credit bureaus website, providing PAN number is mandatory as it authenticates one’s individuality. This cuts down the duplication as Aadhaar number is linked.
  • In the rural areas individuals can now use Aadhaar enabled micro ATMS to withdraw cash. This makes them eligible for credit and subsequently apply for a personal loan or a car loan.
  • PAN card and Aadhaar number linking tracks individuals who uses multiple PAN cards and applies for loan in different banks. This helps banking organizations to figure out an individual who does fraud.
  • Using Aadhaar card, CIBIL score can be easily accessed. This proves useful when it’s time to apply for a loan or credit card.

FAQs on Aadhaar and PAN on CIBIL

  1. Can I check my CIBIL score using PAN card details?
  2. Yes you can definitely check your credit score with any of the credit bureaus by using the PAN details.

  3. Why is PAN card mandatory for CIBIL score?
  4. PAN card is mandatory for getting the CIBIL report as the score is matched to the PAN card number. PAN card is used as an address proof and for filing tax return.

  5. I don’t have a PAN card. How to get the CIBIL report?
  6. Checking the CIBIL score with PAN is easy. However if you don’t have a PAN card do not worry.  You can request the financial organization to use your Aadhaar card details.

  7. Do all the banks check CIBIL score?
  8. Yes all the financial organization’s check the CIBIL score before approving a loan or credit card application.

  9. Is CIBIL score and CIBIL report the same thing?
  10. No both the terms are different but are often interchanged. While CIBIL score is a statistical number that provides your financial performance information, credit report contains detailed information about your past credit history that is used by the banks and other financial organizations to gauge your financial standpoint. 

*Disclaimer

News about CIBIL score

  • RBI Tweaks Guidelines, Assign Risk Weights to NBFCs

    The Reserve Bank of India (RBI) has eased its guidelines for banks to maintain risk weights for non-banking finance companies (NBFCs). The move comes from RBI to allow more funds to flow to stronger NBFCs. RBI said that the guidelines for this will be issued by the end of February. In a bid to facilitate flow of credit to well-rated NBFCs, RBI has decided that rated exposures of banks to all NBFCs would be risk-weighted. The exposures to the Core Investment Companies (CICs) will still be risk-weighted at 100%. As per the present guidelines, a uniform 100% risk weight on bank exposure to rated as well as unrated systemically important NBFCs that don’t take deposits. RBI has also proposed to merge some categories of NBFCs such as loan companies and investment companies to ensure better diversification of business. According to RBI, the recent move of merging existing categories will reduce complexities and give NBFCs better flexibility in their operations.

    10 February 2019

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