An individual’s ability to secure loans is mainly influenced by his or her CIBIL score. In India, the Income Tax Department assigns a unique 10-digit alphanumeric identifier known as a Permanent Account Number (PAN) to each taxpayer.
The relationship between a person’s PAN card and CIBIL score becomes apparent when checking the credit score online or applying for a loan. This article will delve into the PAN card CIBIL score, highlighting the importance of their correlation.
How does a PAN card affect the CIBIL score of individuals?
The details on a PAN card do not affect an individual’s CIBIL score. Modifying or updating information on the PAN card, such as date of birth, financial transactions, or address, has no impact on one’s CIBIL credit score. Even if someone changes their PAN details, it will not result in any change to their credit score.
Furthermore, if an individual is thinking of updating their PAN card details to improve their CIBIL score, it is crucial to know that such updates would not make any difference.
How should one check the CIBIL score online?
To check the CIBIL score with a PAN card online, follow the steps mentioned below:
Step 1: Visit the official website of the CIBIL and click on ‘Check CIBIL Score’.
Step 2: Enter basic information like date of birth, gender, and name.
Step 3: Under the identity proof section, select ‘Income Tax ID number’ and input the correct PAN number.
Step 4: Provide details about monthly income and the type of income earned.
Step 5: Enter contact information such as phone number and email address.
Step 6: Review all details provided and click on ‘Submit’ to proceed.
Finally, an individual can expect to receive the credit score via email within 24 hours after submitting. Before applying for something like a home loan, one should check CIBIL score.
What are the factors that influence the CIBIL score of an individual?
Here are the factors that influence a person’s CIBIL score:
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Number of credit applications
Whenever a person applies for a new credit facility, the lender performs a hard inquiry which affects one’s CIBIL score. Too many hard inquiries reflect the actions of a credit-reliant individual and thus, it lowers the applicant’s credit score.
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Length of credit record
A long credit history provides a clear view of one’s financial health. Being part of the credit system for an extended period allows lenders to assess credit management skills. On the other hand, not having a proven credit history might stop lenders from giving money in uncertain times.
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Credit repayment history
Crucial in evaluating the credit score, the repayment history reflects the ability to meet financial obligations through timely credit and EMI payments. Defaults on credit card dues or delayed loan repayments significantly harm credit health, resulting in a substantial drop in the credit score.
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Credit utilisation ratio
This ratio reflects a person’s appetite for credit, indicating the percentage of credit utilisation compared to his or her total credit limit. Exceeding this ratio leads to negative views from credit bureaus as it increases the likelihood of loan repayment defaults. It is advisable to limit credit utilisation to below 30% of the available credit.
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Credit mix
An individual’s credit score is influenced by the mix of secured and unsecured credit lines in their loan portfolio. Servicing a mix of loan EMIs and credit card dues demonstrates the ability to manage various loan options.
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Issues in the CIBIL report
Errors in the credit report significantly impact an individual’s CIBIL score. Regularly checking credit reports helps track outstanding or missed payments, allowing borrowers to identify and rectify errors that may negatively affect their credit scores.
Individuals can check their PAN card CIBIL score and assess their eligibility for loan facilities provided by banks and NBFCs. Financial institutions also provide pre-approved loans to their loyal customers which expedites the loan approval process. To explore pre-approved offers on home loans, a person can simply enter a few personal details on their preferred bank’s website.
In conclusion, understanding the relationship between the PAN card and CIBIL score is crucial for individuals seeking credit financing or loans. Utilising loan facilities based on the Checking CIBIL score with PAN cards is a convenient way for individuals to access credit and exclusive deals offered by financial institutions.
