A credit score, typically known as the CIBIL score, is an essential factor that every lender looks into when prospective borrowers apply for any loan. Hence, A good CIBIL score designates a person’s financial ability and stability.
What is the CIBIL score?
A CIBIL score is a three-digit numeric number that ranges between 300-900 based on a comprehensive examination and an exhaustive analysis of an individual’s credit files and records, representing the creditworthiness of that person.
What is a good CIBIL score?
A CIBIL score between 700 -900 is considered a good CIBIL score that gives the lender confidence and proves their creditworthiness. However, you must have a CIBIL score of 750 or higher if you apply for an unsecured loan.
If your CIBIL score exceeds 750, congratulation! you may get a better interest rate and experience a faster approval process as a borrower. You must understand that every lender prefers a high CIBIL score because they don’t want to take any risk.
They try their best to ensure that their browser may not default after receiving the loan or credit card. If any of their browsers default on their loan, ultimately, they will suffer a loss. Nobody wants to face any financial crunch.
So, your lenders have no other option but to prefer a high and healthy CIBIL score before approving your loan or credit card application. A healthy CIBIL score will also help you save valuable time and money in the long run.
What are the advantages of a good CIBIL score?
A good CIBIL report will give you a ton of benefits. Therefore, a loan applicant must know the most common advantages of a higher CIBIL score before applying for any credit card or loan to determine whether the credit card or loan may suit his requirements or not. Let’s have a look at the primary benefits of a good CIBIL score.
1. Lower interest rate:
Low-interest rates are one of the primary benefits of retaining a good CIBIL score. Interest is levied based on the possibility of defaulting. A good CIBIL score decides the browser’s creditworthiness and timely repayment history of previous loans.
2. Higher credit limits:
A good CIBIL score shows that you’re a decent and trustworthy borrower. Nevertheless, your lender may not hesitate to deliver a higher credit limit or loan amount. So, a higher CIBIL score will eventually help you to get a higher credit limit.
3.High approval chance:
Almost every lender will pull out your CIBIL report to verify your CIBIL score and credit history if you apply for a loan or a credit card. This process is known as a hard inquiry, and your CIBIL score may get a hit whenever such an inquiry is launched.
The effect can be irrevocably damaging if your loan or card application gets rejected. Therefore, if you have a good CIBIL score, the possibility of your credit card or loan approval is exceptionally high.
The conclusion is that a high and good CIBIL score not only ensures you a higher approval chance but will also help you prevent further damage.
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