CIBIL Check by PAN Card: A Quick Guide to Assessing your Credit Health

In India, the Credit Information Bureau India Limited (CIBIL) is one of the four credit agencies that assesses and assigns credit scores. A CIBIL score is an important financial numeral that replicates the creditworthiness of an individual. 

It plays a crucial role in determining whether a borrower is worthy of getting credit facilities like loans or credit cards from financial institutions. Understanding the significance of retaining a healthy CIBIL score and how to check a CIBIL score by PAN card is crucial for handling one’s financial well-being and attaining financial goals.

What are the steps to check the CIBIL score using a PAN card?

Checking CIBIL scores online using the Permanent Account Number (PAN) card is an easy process. There are two methods of checking an individual’s credit score through PAN. These include the free method and the subscription method. Here are the step-by-step processes involved in these methods:

Step 1: Navigate to the official website of CIBIL™ and then click on ‘Free credit score’.

Step 2: After this, an applicant needs to enter his/her basic details such as name, gender, date of birth, etc.

Step 3: Then the applicant must click on the ‘Income Tax ID Number’ (PAN) option under the ‘Identity Proof’ tab to insert the valid PAN number

Step 4: Once the PAN number is entered correctly, the applicant must input his/her monthly income as well as the type of income.

Step 5: After this, the applicant must provide his/her contact details such as the mobile number and email ID, and click on ‘Proceed’.

Step 6: Applicants should cross-check all the details correctly and click on ‘Submit’ to continue with the processing of the request.

After submission, applicants will receive their credit score via SMS or email within the upcoming 24 hours of the request.

Additionally, if anyone purchases a subscription to CIBIL, he/she can check the credit report on periodic intervals like quarterly, half-yearly, or yearly. The steps to the same are as follows: 

Step 1: Navigate to the official website of CIBIL 

Step 2: After this, applicants need to click on the ‘Get Your Credit Score’ option.

Step 3: Then, customers have to select the subscription method and enter the basic details like PAN number, email ID, date of birth, etc.

Step 4: Subsequently, the customer needs to agree to the terms and conditions of CIBIL and click on the ‘Proceed to Payment’ option. 

After completing all these steps, the customer will get his/her CIBIL report via email within 24 hours of application.

Which factors affect the CIBIL score of an individual?

Retaining a healthy credit score is the key to getting quick approvals on loan requests. Following are the notable factors that affect the CIBIL score of an individual:

Credit history

The credit history of a person is the most important factor that starts when he/she applies for a loan or credit card they should have a good cibil score. It encompasses his/her credit card usage, repayments of loans, number of credit inquiries, etc. Borrowers with a long credit history and appropriate repayment records are considered more reliable in the judgment of lending institutions. On the contrary, anyone having a short credit history with many defaults in repaying dues may end up hindering their CIBIL scores and face trouble in availing loans. 

Credit utilisation ratio 

The credit utilisation ratio is the percentage of an individual’s credit card usage against his/her credit limit. Precisely, it is sensible for borrowers to make sure that their credit utilisation ratio does not go beyond 50%. However, if this percentage crosses this margin, it will signify the borrower’s credit-hungry behaviour, which might elevate credit risk for lenders. Furthermore, it can harm the CIBIL score of borrowers. 

Errors in the CIBIL report

Another important factor responsible for affecting the credit score is the errors in a CIBIL report. For borrowers, it is sensible to verify their CIBIL scores and credit reports from time to time. Although it does not directly enhance credit scores, checking it periodically helps an individual to track if they have any outstanding or missed payments of preceding loans. Furthermore, by verifying a credit report, borrowers can spot the errors and fix them on time or else it can significantly affect their CIBIL score.

Credit inquiries

Another notable factor that disturbs an individual’s CIBIL score is too many credit inquiries. Whenever an individual applies for a loan, the lender analyses his/her credit history in order to figure out the creditworthiness. During the evaluation, if the lending institution discovers multiple credit inquiries by the borrower within a short span of time, it will point out his/her hunger for debt, ultimately shattering the CIBIL score and credit history.

Debt to income ratio

Almost all lending institutions consider the debt-to-income ratio of the individuals before approving his/her loan request. It specifies the number of open credit accounts held by the borrowers. If this ratio is higher, it will signify that the borrower is already overburdened by monthly installments. In general, it is recommended for an individual to keep his/her expenditure in check and maintain a debt-to-income ratio between 25% and 35%.

Availing multiple credit products

Every time an individual avails a credit product, the lender will verify his/her credit report for determining the creditworthiness. This action is called hard inquiry. If an individual applies for too many credits, multiple hard inquiries are conducted against his/her account. This will not only hamper the credit score but also display his/her hunger for credit. 

Many reputed financial institutions provide pre-approved offers on various credit products such as home loan, property loan, etc. This helps in accelerating the overall lending process. Individuals can check their pre-approved offers by entering their name and contact details.  

Checking CIBIL score by PAN card is one of the most user-friendly approaches to verifying a credit report. For this, borrowers need to visit the official website of CIBIL and do the formalities as stated above. Verifying credit reports periodically can help in spotting errors, which can negatively affect the CIBIL score.