Good news for first-time loan applicants! The Ministry of Finance has officially clarified that banks cannot reject loans solely because of a low or zero CIBIL score. Speaking in the Lok Sabha, minister of State Pankaj Chaudhary reaffirmed the Reserve bank of India’s (RBI) directive that there is no minimum credit score requirement for borrowers with no prior loan history. Here’s what you need to know:
1. No CIBIL Score Needed for First-Time Borrowers
RBI’s master Direction (6.1.2025) clearly states: banks cannot reject applications just because a borrower has no credit history.
This is a huge relief for young professionals, entrepreneurs, and students applying for their first-ever loan.
2. RBI Has Not Set Any ‘Minimum Score’
Unlike popular belief, there is no RBI-prescribed minimum CIBIL score for loan approval.
Lenders can still decide based on their own internal policies, but they cannot deny purely because of a missing score.
3. What Exactly Is a CIBIL Score?
A three-digit number (300–900) that reflects your creditworthiness.
Calculated by the Credit Information Bureau (India) Limited (CIBIL).
The higher your score, the higher your chances of getting instant approvals and lower interest rates.
4. Due Diligence Still Applies
No score doesn’t mean no checks. Banks will still assess:
Past repayment history (if any)
Delayed repayments or defaults
Loans settled, restructured, or written off
This ensures only genuine borrowers benefit from the rule.
5. Cost of Accessing Your Credit Report
Credit Information Companies (CICs) can charge up to ₹100 for providing your report.
As per RBI’s 2016 circular, every individual is entitled to one free credit report per year.
Any charges above ₹100 for additional reports are not allowed.
Bottom Line
First-time borrowers, relax! Your lack of a CIBIL score cannot be held against you anymore. While banks will still carry out background checks, the government’s clarification ensures that no young or new applicant is unfairly excluded from the financial system.
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