A CIBIL credit score is based on the borrower’s entire repayment history, previous loans, and credit card balances, active or closed accounts, and other credit-related activities. So what does it mean to have your credit score as a CIBIL score minus one?
Let’s find out what CIBIL score minus 1 means, how it affects your credit future, and what you can do to change it.
A CIBIL credit score indicates your financial health. CIBIL, a credit rating agency, calculates a score based on your repayment history, loan history, borrowing behaviour, and more to determine your credit-consuming eligibility. It is a three-digit number that ranges from 300 to 900.
This score is the main factor in determining your loan eligibility for a lender.
A CIBIL score 1 means that there is no retrievable information about your borrowing behavior. It is also known as NH, or 'No History'. No credit history, no recent loan or credit card application, and no direct credit exposure can lead to this.
Since credit score is a deciding factor for loans, it may be challenging to get a loan with a CIBIL score minus one. While not impossible, some lenders reject applications based on credit score. Hence, establishing and maintaining a good credit history is critical for avoiding a CIBIL-1 score and increasing borrowing opportunities.
If your CIBIL record is less than six months old, your credit score will be zero, as the credit bureau lacks sufficient information to assess your credit history and assign you a credit score. Since it takes time to build a credit history, if you are new to credit and have recently taken out your first loan, you may see a CIBIL score of zero on your credit report.
Additionally, being calm when you see a zero on your credit report is important. It doesn’t say anything negative about your credit profile. You have to be patient and keep working on your credit borrowing and repayment habits.
While it is common knowledge that the CIBIl score ranges from 300 to 900, a CIBIL score of -1 is nothing uncommon. Here are the features of CIBIL Score minus 1:
A CIBIL Score of -1 indicates that the credit bureau has no information about your previous debt repayment because credit has not been available in the applicant's name for at least the previous 24 months
Due to the lack of such information, the lender is unable to approve the borrower's credit application because determining the applicant's creditworthiness is difficult
In such cases, the bank or financial institution may request additional documents that demonstrate your financial strength and repayment capacity
You can submit previous ITRs, employment documents such as salary slips, income certificates & more as proof of your financial capacity
Even if your CIBIL credit score is negative or zero, it is possible to get loans from a few lenders. Here is how you can get a loan or credit card with a zero or negative score:
Several lenders provide loans to borrowers with less-than-ideal credit histories. These lenders factor in other parameters such as employment history, income, and consistency of bank account balances. Moreover, borrowers can also avail of starter loans or credit cards to build their credit score over time.
To improve your CIBIL credit rating, apply for secured loans or small loans and repay the entire loan amount on or before the due date.
Secured loans enable you to obtain a large loan at a low-interest rate based on the value of your asset, such as gold, real estate, fixed deposits, vehicles, and so on. Collateral assures the lenders that you will be able to repay the loan. In case you default, the lenders can sell your assets to retrieve the remaining loan amount.
Despite your low credit score, you can improve it by regularly reviewing your CIBIL credit report for defaults or late payments affecting your credit score. Furthermore, avoid applying for multiple loans or credit cards to avoid appearing credit-hungry and maintain good financial management.
Borrowers can approach any bank or lending institution to avail of a loan even if their CIBIL score is negative. A CIBIL score minus one does not mean that your CIBIL score is negative. Instead, it means that CIBIL doesn’t have enough information regarding your credit activity.
If your CIBIL score is either -1 or 0, then banks consider other parameters to determine your eligibility for the loan. These parameters are
You can follow the below steps to gradually increase your credit score.
If an individual's CIBIL credit history is only available for less than six months, a credit score of zero or NA is assigned, indicating that sufficient history isn’t available. A credit score of -1 or NH indicates that you do not have a credit history.
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