The Role of Credit Scores in Availing Loans - Insights for Bajaj Finserv Users

Financial needs often strike without warning. Such times often require individuals to avail of loans. It is worth mentioning that your ability to secure a loan depends on your credit score, which is determined by rating agencies like CIBIL. CIBIL’s full form is Credit Information Bureau (India) Limited, and it is the premier credit rating agency in the country.

A credit score represents your creditworthiness and is assessed by lenders to calculate the risk of lending you money. Usually, a higher credit score makes it easier to get loans with better terms, while a lower score can limit your options.

Bajaj Finserv, a leading financial services provider, offers a one-of-its-kind “Credit Pass” subscription service which lets you monitor and track your credit score. Also, subscribers get to use a personalized dashboard and periodically receive credit health reports.

Moreover, maintaining accurate personal details like those on your PAN card are important. This helps in avoiding discrepancies, which can negatively impact your credit score.

Let us understand the role of credit score in determining your loan eligibility and see how Credit Pass by Bajaj Finserv can help you monitor and improve your credit scores. Also, we will learn how you can make PAN card corrections following a simple step-by-step guide.

What Is A Credit Score?

A credit score is a numerical representation of an individual's creditworthiness. It ranges from 300 to 900 and is provided by CIBIL, one of India's main credit information companies.

It is worth mentioning that a high CIBIL score enhances loan approval chances and helps in securing favorable interest rates. CIBIL calculates these credit scores based on an individual's credit history and financial behavior.

What Is The Significance of Credit Scores While Obtaining Loans?

Credit scores reflect the borrowing and repayment habits of borrowers. They are widely used by lenders while extending loans. Let’s understand why these scores are vital in the loan approval process:

• Lenders use credit scores to assess the risk of lending money to a borrower. A higher score suggests a lower risk.
• Applicants with higher credit scores are more likely to get their loans approved.
• Borrowers with higher scores often receive loans at lower interest rates, as they are deemed less risky.
• Higher credit scores often result in higher loan amounts being sanctioned.

How Can the Bajaj Finserv Credit Pass Help You?

To help individuals track and monitor their credit scores, Bajaj Finserv offers India’s first subscription-based service called Credit Pass. Powered by CIBIL, you can use Credit Pass to easily check your credit score and get a detailed overview of your credit health. To understand better, let’s check out some of its major benefits:

• Credit Score and Dashboard Access

Using the Credit Pass, you can quickly check your credit score through a personalised dashboard that shows your overall credit health. This helps determine if you can easily get a loan or credit card.

• Obtain A Bird’s-Eye View of All Your Finances

All Credit Pass subscribers get a customized dashboard, which is easy to use and lets you view all your credit cards, loans, repayment history, and more in one place.

• Track Credit Factors

Credit Pass lets you monitor important factors that affect your credit health, such as repayment history, credit utilization, length of credit history, types of credit, and loan inquiries.

Let us take a look at an example:

Shalini has a home loan and two credit cards. She pays her EMIs on time but finds it difficult to track all her loans and monitor her credit health. After obtaining the Credit Pass subscription, she can get a comprehensive summary of her repayment schedules, details of her various loans, and other financial information in one convenient location (dashboard). Also, she can regularly track her credit score and periodically receive credit health reports.

How Do Credit Scores Impact Loan Eligibility?

Credit scores directly influence an individual's loan eligibility. Let’s see how different credit score ranges affect your chances of securing a loan and interest rates:

CIBIL score range	Remarks	Indication
Less than 650	Poor	Indicates a history of delayed payments. High risk of default.
650-699	Average	Suggests struggles with meeting payment deadlines.
700-749	Good	Indicates good credit behavior. Higher chances of loan approval but might not get the best interest rates.
750-849	Great	Showcases consistent and timely payment history. Low risk of default.
850-900	Excellent	Easiest to secure loans with lower interest rates. Lenders are highly likely to approve loan applications.

It must be noted that the Bajaj Finserv Credit Pass is an excellent way to keep track of your credit score and understand your financial standing. Using it, you can check your updated CIBIL score every month. Please note that frequent checking of credit scores does not impact it.

Furthermore, premium plan subscribers get access to predictive tools, such as a credit score simulator and EMI calculator, which further help in making informed choices while applying for loans and credit cards.

What do Lenders Look For In Credit Scores?

At the time of evaluating loan and credit card applications, most lenders consider the following factors:

Payment History: Timely repayment of previous loans and credit card bills.

Credit Utilization Ratio: The ratio of current credit card debt to the total available credit limit.

Length of Credit History: Duration of the borrower’s credit history.

Credit Mix: Variety of credit accounts such as credit cards, personal loan accounts, installment loans, and mortgage loans.

Recent Credit Activity: Number of recently opened credit accounts and recent credit inquiries.

Monitor your credit scores and overall health using Bajaj Finserv Credit Pass. Enhance your loan eligibility and secure favorable interest rates today.

How To Achieve A High Credit Score?

It is worth mentioning that missing even a single payment can significantly damage your credit score. To avoid this mistake, most individuals set up reminders or automatic payments. Let us check out some other common mistakes that you must avoid to maintain a healthy credit score:

• Do Not Max Out Your Credit Card

High credit utilization (using a large portion of your available credit limit) usually lowers your score. Hence, always aim to keep your usage below 30% of your total credit limit.

• Do Not Close Your Old Accounts

By closing old credit accounts, you end up shortening your credit history. This negatively impacts your score. Hence, it is always better to keep them open.

• Do Not Ignore Credit Report Errors

Failing to check and correct errors in your credit report results in a lower score. You can avoid this mistake by opting for the Bajaj Finserv Credit Pass, as all subscribers regularly receive accurate and error-free credit health reports.

How To Make PAN Card Corrections And Improve Credit Score?

Be aware that accurate information on your PAN (Permanent Account Number) card is crucial. That is because discrepancies usually lead to issues with your credit report and score. Furthermore, most lenders verify your PAN card details during the loan approval process. Accurate information usually speeds up this process and reduces the chances of rejection. Hence, in cases of mismatches, you need to make PAN card corrections. Let’s check out how you can make these corrections online through the NSDL (Protean) portal:

• Go to the official NSDL website (Protean portal) to start the PAN correction process.
• Find the ‘PAN Services’ section on the website.
• Choose the ‘Apply’ option under the 'Changes or correction in PAN data’ category.
• Enter the required details in the PAN card correction form, including your PAN number and the specific corrections you need.
• Make sure the information is accurate, especially if you are changing your name, address, or date of birth.
• Upload the required supporting documents for the corrections. For example, if you are changing your name, you might need to upload a marriage certificate or a gazette notification.
• Pay the applicable fee for the PAN card correction online using the various payment modes available. Please note that the fee varies based on whether the PAN card will be delivered within India or internationally.
• For additional security, you might also need to verify your details using an OTP sent to your Aadhaar-registered mobile number.

After successfully submitting the form, you will receive a 15-digit acknowledgement number. Use this number to track the status of your PAN correction application on the NSDL website.

Alternatively, you can also follow an offline process for PAN card correction using a PAN correction form. Let’s see the steps involved:

• Go to the official NSDL website and download the ‘Request For New PAN Card or/And Changes or Correction in PAN Data’ form.
• Carefully fill in the form with accurate details.
• Submit the completed form along with the necessary supporting documents to the nearest NSDL collection center.

After submission, you will receive an acknowledgement slip. This process ensures your PAN card information is updated and accurate.

How To Get the Bajaj Finserv Credit Pass?

To get the Bajaj Finserv Credit Pass subscription, you can follow these simple steps:

1. Go to the official Bajaj Finserv website
2. Find and click on the 'Credit Pass' option on the website
3. Click on the 'Sign up' button to start the application process
4. Input your mobile number and verify it using the OTP (one-time password) sent to your phone
5. Now, fill out the online form by providing your PAN card number, PIN, email ID, date of birth, and salary range in the online form
6. Click on the 'Verify Details' button. This will take you to the payment page
7. Choose your preferred payment method and make the payment. The amount will vary as per the Credit Pass plan subscribed to
8. Once the payment is made, you can log in to your Credit Pass account

Now, you can access your personalized dashboard. Using it, you can check your latest credit score and view your credit health report.

Conclusion

Maintaining a good credit score is essential for securing loans with favorable terms. Your credit score reflects your creditworthiness and is provided by agencies like CIBIL (CIBIL’s full form is Credit Information Bureau (India) Limited). To help you monitor and improve your credit score, Bajaj Finserv, a leading financial service provider, offers a unique Credit Pass subscription. This service provides access to a personalized dashboard, credit health reports, and modern predictive tools like the credit score simulator and EMI calculator. Using the Credit Pass, you can better manage your credit health and substantially enhance your loan eligibility.

Furthermore, accurate information on your PAN card is crucial, as discrepancies can negatively impact your credit score. You can easily make PAN card corrections through the NSDL portal by following a few simple steps mentioned above.

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(This article is part of IndiaDotCom Pvt Lt’s sponsored feature, a paid publication programme. IDPL claims no editorial involvement and assumes no responsibility or liability for any errors or omissions in the content of the article.)