As we have learnt earlier, anyone who has a CIBIL score less than 700 have some kind of troubles getting a loan. There could be delays in the credit decision or a downright rejection. For those with a CIBIL score of -1, getting a loan might not be an easy task as well. A credit score of -1 means that a customer has no credit history and will be marked as ‘NA’ or ‘NH’ in Credit Information Report (CIR) which suggests no record. Such a score is sometimes viewed negatively by the lenders and you may have some difficulty availing a large credit or a loan.

Please note that, "If your score is low because of default, then chances of getting a loan is lower. But, if the score is low because of the less amount of loan taken or because credit history is relatively recent then you can still get the loan.”

You are likely to get a score of zero only when your credit history is less than six months old.

Getting a first time loan is somewhat similar to improving the credit score. Here is a list of few things that you can explore to build your credit score if you are a first time borrower.

  1. Get a Consumer Loan: It is difficult to get a personal loan without CIBIL credit score. However, you could try getting a consumer loan which eventually will help you build your credit history if you pay your EMIs on time.

    A consumer loan is usually for a short duration and it can be taken for appliances, furniture or any other item with maximum retail price less than 1 Lakh. Most lifestyle stores, electronic stores have an option for consumer loan. Consumer loans usually have a fixed interest rate so it makes sense to purchase small ticket items to reduce monthly EMIs.

  2. Apply for a secure credit card: A secure credit card is a credit card taken against FD (Fixed Deposit). Few banks in India have a credit card against FD option and this option is good for first time borrowers. A secure credit card behaves like a normal credit card, except the credit limit is based on your Fixed Deposit. The bank will ask you to open an FD and about 60-70% of the FD can be used as the credit limit. If you pay your dues on time, then the limit remains the same. However, if there are delays in payment, the Bank has full authority to liquidate the FD. Not to mention, this will lower your score further.

    NOTE: If you have a salaried account with a Bank, then keep looking for credit card messages from your bank. Once you have enough banking history, Banks send messages that you qualify for a credit card. These are regular credit cards which Banks offer once they are comfortable with your account standing.

  3. Co-operative/Smaller banks or NBFCs: Smaller banks or Non-Banking Financial Companies (NBFC) provide loans of smaller amounts and lend at higher rates of interest. But the good news is that they are more likely to lend without being too strict about credit score. Typically, NBFCs have disbursed loans for a credit score as low as 350. The key thing here is to do some research. NBFCs have specific purposes and unlike Banks, each NBFC deals in some very specific loan categories. So some research is required to find which NBFC suits your requirements and whether you have all the documents they require.

  4. Start saving: One of the best advice we can give you is to leverage your steady income for a personal loan. If you are not looking for a loan right now, but planning in the future, then the best thing to do is maintain the steady and positive balance in your account. A positive balance and saving of at least 10-15% of salary by the end of month gives confidence to lending institutions. Be patient, build a good banking history and make sure your bank account looks solid before applying for a loan.

  5. Guarantor: If nothing works out, you could request a family member or friend who has a better CIBIL score to stand as a guarantor for the loan. This increases the chances of your loan being sanctioned. One thing to note here is that if you take a loan then the CIBIL report for your guarantor and you will show the loan. This is a contingency measure taken by banks to ensure if you fail to pay the loan then the Guarantor is equally liable.

  6. Evaluate loan requirement: When you ask for loan, ask for the smallest amount possible to cover your needs. This will increase your chances of getting a loan and being able to repay it. You don’t want to saddle yourself with more debt than necessary, and you certainly don’t want to wind up with a large debt you can’t afford to repay.

This wraps up our section on credit scoring. If you have any questions about our posts, please feel free to reach us at