If you are planning to take a bank loan for the first time but have no CIBIL score or a very low one, there is good news for you. The central government has made it clear first-time loan applicants do not need to meet any minimum CIBIL score requirement.
According to Reserve Bank of India (RBI) guidelines, banks are not allowed to reject a loan application only because the person has no credit history. This means millions of people who are applying for their first loan can feel relieved.
On January 6, 2025, RBI issued a Master Direction advising banks to treat new applicants fairly. Banks must not dismiss the application only due to absence of past credit records. Minister of State for Finance Pankaj Chaudhary also confirmed that RBI has set no minimum credit score condition for first-time borrowers.
Limit on CIBIL Report Fees
Many people complain about high charges for getting their CIBIL report. Addressing this, Minister Chaudhary said that no Credit Information Company (CIC) can charge more than ₹100 for providing the report.
RBI also directs that every person should receive one free full credit report every year in electronic format. This rule has been in effect since September 1, 2016.
What is a CIBIL Score?
A CIBIL score, also called a credit score, is a three-digit number ranging between 300 and 900. The higher the score, the better your chances of getting a loan approved.
A credit report contains records of your loans, repayments, and credit card transactions. Timely payments help maintain a strong score, while delays or defaults can lower it.
Banks Will Still Do Checks
While the CIBIL score is not mandatory for first-time applicants, banks will still perform due diligence. They will look into your financial behaviour, any past records of repayment delays, restructured loans, or settlements.
In short, the government has removed the barrier of minimum credit score for first loans but responsible financial conduct will still matter.