Many people believe that only people with a good CIBIL score can get a loan easily. But those who are taking a loan for the first time often face difficulties because they do not have any credit history. Your CIBIL score increases only after you take a loan and repay it on time.
To help such new borrowers the Indian government and the Reserve Bank of India (RBI) have introduced new rules. According to these rules, banks cannot reject a loan application just because the person does not have a CIBIL scoreLenders must consider other documents and financial details before making a decision.
What Is a CIBIL Score?
A CIBIL score is basically your financial report card that ranges between 300 & 900. It shows how well a person repays their loans and EMIs.When someone repays loans on time their score increases which builds trust with lenders.A higher score means better chances of getting loans at lower interest rates. However, not having a CIBIL score does not mean you are a risky borrower it simply means you haven’t taken any loan yet.
Who Can Get Loans Without a CIBIL Score?
People taking loans for the first time such as students applying for education loans or individuals seeking home, business, or personal loans—can still get approval even without a CIBIL score.
In these situations, banks look at your income, salary slips, job stability, bank statements and other financial papers instead of depending only on your CIBIL score. This allows new borrowers to get loans based on their financial capacity rather than their credit history.
Government and RBI’s Updated Rules
According to the government, the CIBIL score should not be the only factor for approving or rejecting loans. The RBI has also clarified that there is no minimum credit score requirement for loan approval. Banks and financial institutions have been advised not to automatically reject applications from people who have no credit history. They must evaluate the borrower based on other important financial criteria.
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Credit Bureaus in India
India has four major credit bureaus that create credit reports for individuals. These are TransUnion CIBIL, Equifax, CRIF High Mark, and Experian. These bureaus collect financial and repayment information to prepare credit scores. Even if a person does not have a score today, it will start building after they take their first loan and repay it on time.
Conclusion
Not having a CIBIL score should not stop anyone from applying for a loan. With the new guidelines, banks will check other financial details to decide loan eligibility. Once you take a loan and repay it responsibly your CIBIL score will begin to improve, helping you get better loan offers and lower interest rates in the future.