A CIBIL Score plays a vital role in making your creditworthy. Every time a prospective borrower applies for a credit card or a personal loan, it leads to lenders pulling off your Credit Score.
A Credit Score by CIBIL is considered a rating parameter in India. Your Credit Score may range between 300 and 900 points. Having a higher CIBIL Score denotes strong credit health of the borrower. Anything above 700-750 means having a robust CIBIL Score and the lender would prefer to lend a loan to you at a lower rate.
Grabbing the personal loan for low CIBIL score is possible, but the loan would be awarded to you at a higher rate of interest. As a result, when you avail a personal loan for low CIBIL Score, you will need to manage to pay a higher EMI in the future to boost your credit score.
Hence, the importance of having a good CIBIL Score is best judged while applying for a personal loan, home loan, credit cards and other debts.
How Does One Get a CIBIL Score?
When a borrower begins to build a credit history, he/she builds a CIBIL Score. According to CIBIL, a Credit Score given to an individual shows that the credit agency has received at least six months of his/her credit history during the last 2 years.
For new accounts, they give a Transunion credit rating between 1.0 and 5.0. Just like a CIBIL Score, a higher credit index indicates a better credit rating of the borrower.
Steps to Increase your CIBIL Score
- Pay off your unpaid dues
If you have any credit card outstanding, you should try to get it closed at the earliest. Hence, try to spend only what you can repay in full and by the due date. If you keep heavy balances on your credit card, it is bound to affect your Credit Score negatively.
- Don’t max out your credit card
Experts suggest not using your credit card more than 30-50% of the credit limit. If you use your credit limit more than that, you may be taken as a credit hungry person. Hence, lenders may assume that you may not be able to manage another debt. As a result, your personal loan or other loan application may be rejected. Hence, don’t max your credit card limit if you don’t want it to be hampered.
- Increase your credit limit
If you have a good credit history, then your creditor may enhance your CIBIL Score. As a result, the increase in your CIBIL Score may have many points stored for future use.
You are now aware of the importance and benefits of having a good CIBIL Score. You can access your financial profile now and then only apply for a personal loan online.
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You can check out your pre-approved loan deals now by sharing your basic details such as your name and mobile number.
Benefits of a Good CIBIL Score
Quick loan financing
Once you submit a loan application to a lender, the first thing that it checks is your creditworthiness by pulling your Credit Score and also you can track your usda loans.
If you have maintained a higher Credit Score, you can negotiate or directly get lower interest-based offers from lenders.
All borrowers with a robust Credit Score are bound to get quick loan financing.
Some banks may even waive off a customer’s processing fee and prepayment charges in the event of a Higher Credit Score.