Want Car Loan ? Have Good Credit Score – Bankers Relying on CIBIL Report

Car Loans - CIBIL Inquiry IndiaAuto Loans in India are on rise in the past 3 years and the demand is especially coming from smaller cities. After the 2008 Crisis, Banks have tightened their lending norms towards unsecured loans – Credit Cards & Personal Loans and even for Auto Loans they are increasingly relying on Credit Reports ans Scores from all the Three bureaus – CIBIL-Transunion, Experian and Equifax.

Approximately 20% of the inquiries in the last few years have been for new Auto Loans at CIBIL. Delhi NCR alone contributes 35% of the Inquiries in this segment. So if you are planning to BUY a Car, kindly get Credit Report and Scores from atleast two of these Agencies – CIBIL-Transuinion or Equifax or Experian. Then make sure of the following to get approval for your car loan,

  • No Defaults or Settlement in the Last 3 Years
  • Credit Score of atleast 750 on a Scale of 900
  • Source of Monthly Income proving your ability to re-pay the Loan.
  • If you have other running loan accounts , the surplus after your monthly household expenditure, other loan EMIs must be atleast twice that of your Car Loan EMI.

Banks have also become cautions in lending to the Housing Sector as Indian Laws under the Negotiable Instruments Act and SARFAESI Act are not very useful while enforcing and this has resulted in 40 Lakh cases of Cheque Bounce pending in various courts of India.

2 Responses to “Want Car Loan ? Have Good Credit Score – Bankers Relying on CIBIL Report”

  1. I have defaulted with one credit card and same has been settled 7 month ago. I have other credit card with clear payments. I have also got a Home loan. Very recently I had applied for a home loan top up from the same bank, where my home loan is active. They have rejected my application even though I have loan eligibility from both ends (Home valuation & Income). they have stated that this rejection has happened due to the settlement history of my credit card. Mt CIBIL score is around 600.
    Please suggest some remedy at the earliest.
    Should I talk to the credit card bank to renegotiate to make my CIBIL proper ?
    Or should I apply for a top up after a few years, as Bank has told me that if the settlement would have done a year back, they could be able to give a top up to my existing home loan.
    Or I should talk to & apply to some Agency, who can help me to make my credit history a healthy. Whether these agency really helps in making someone credit ability healthy?

    Please advice. I always got clarity in your publishing. please help.

    Thanks & Regards,

    Samir

  2. Please Read this on how CIBIL Score is Calculated http://www.cardbhai.com/2012/10/how-is-cibil-transuinion-credit-score-calculated.html

    Consistent Home Loan Payment Track Record will Definitely Boost Your Score.

    Re-negotiations with the Credit Card Bank will definitely help. But make sure that they REMOVE the Settled remark when you pay in FULL. However, Score will not come back within 3 months, it will still take time as long as you keep paying home Loans.

    Finally, why are you in a Hurry to Top-up ? What are you going to do with the Money? Be Prudent in taking Loans and accessing Home Line of Credit is the Worst behavior like how Americans took Cruise Vacation, Boats, etc without realizing they are drilling holes in their shelter.

Leave a Reply