Is your CIBIL score ‘NH’? If so, you may be wondering what NH means in CIBIL?
NH in CIBIL score means that there is no history of credit for that specific person.
To know more about this in detail, read ahead.
The CIBIL stands for Credit Information Bureau India Limited, and it is the main company that provides credit ratings for customers. CIBIL scores range from 300 to 900, and as you go higher on this scale, your creditworthiness also improves.
A CIBIL score above 650 is considered ‘fair’ and you may face challenges while procuring a loan, but it is possible. Once your CIBIL score is above 700, you can get loans easily at attractive interest rates.
CIBIL score NH means a credit report with no history. It simply means that the credit rating companies have no history of your credit behavior.
When you are new to credit and have never taken a loan or a credit card, there is no way for credit companies to calculate your creditworthiness. Thus your score may show up as ‘Not Available’ or ‘No History’.
If your credit score is NH, and you want to take a loan, don’t worry. It is not impossible to get a loan without having a credit score. Everyone begins at some point.
In a condition where your previous loans cannot act as your guarantee, the lender might look at other factors like -
If you have a high paying job, it will be easier for you to get a loan. On top of that, if you have a salary account that you have been maintaining for a long time, it can act as a security for you.
If you don’t have any credit history, being employed at a top corporate company can act in your favor. And if you have been working for a long time, and your job is secure, there are high chances of the lender approving your loan.
The loan amount you apply for has a big role, given that this will be your first loan. In case you apply for a loan that is comparatively small depending on your salary, you will easily be able to get it. But getting a big loan without a credit history can be challenging for you.
Getting a secured loan without a credit history will be fairly easy as compared to getting an unsecured loan. In case of a secured loan, the collateral will act as a security, and make up for the lack of credit history.
Opting for a guarantor or a co-signer who has a good credit score can also make your loan application process easier.
If you are new to credit, you must work on building your credit score. Here are some tips to build your credit score right from scratch -
Many banks or lenders give small loans which can be used for building your credit score. These loans might have high interest rates, and small tenures, but they can help your credit score once you pay them off.
You can also apply for credit cards that your bank might offer you. Use the credit cards in moderation, and clear the bills every month to build a good credit score.
You might choose to purchase a consumer durable or a home appliance on an EMI. There are several companies that give EMI cards for this purpose. Once you start paying those EMIs, no matter how small, that will build your credit score.
Apply for a small personal loan from a lender who is a bit relaxed about CIBIL scores. The loan might be costly for you but it will help build your credit score, which will help you take bigger loans at affordable rates in the future.
If your credit score is NH, it means that you have no credit history. There is nothing to worry about if you are new to credit. It is still possible for you to take a loan.
In case you are planning to take a big loan in the future, it is a good idea to build your credit score by taking a small loan. You must also check your CIBIL score regularly to monitor it.
It might be difficult for you to get a loan if your credit score is NH, but it is still possible. You can get smaller loans, even though you might have to pay a higher rate of interest.
When you check your CIBIL score yourself, it is considered a soft enquiry and it doesn’t affect your score. You can check it as many times as you want.
But when credit companies check your CIBIL before approving your loan, it is considered a hard pull, and too many enquiries might affect your credit score. Thus it is not advisable to approach too many lenders while availing a loan.
If you have a long term relationship with a bank, an active bank account with regular money transfers, you can easily get a credit card from them.
If you have never taken a loan or a credit card before, i.e., if you are new to credit, there is no information about your credit behavior. Thus, your credit score will show as NA (Not Applicable) or NH (No History).
Whether an NH score is good or bad depends on what kind of loan you are trying to apply for. Having no credit history may be bad for some big loans, as it is easier to get a loan if you regularly take and repay loans on time.
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