What is a CIBIL Score?
In the year 2000, Trans Union CIBIL was incorporated as Credit Information Bureau of India Limited. This organization issues a score called a CIBIL score for a borrower. It is also known as credit score. This score denotes the creditworthiness of the borrower and his ability to repay the loan on time.
What is a Good Credit Score?
A person who has a good Credit Score has the ability to repay the loan with interest on the given time to the bank. A Score is a three-digit number calculated on the basis of the financial history of the applicant. It ranges from 300 to 900. The higher the score the better chance of your loan being approved. 79% of the loans approved are for those who have a score of 750 or more, says CIBIL’s analysis. Learn more.
Factors affecting CIBIL score
The score is based on several factors. Such as your payment history, types of credit and number of loan accounts, guarantors on the loan, credit history, opening and outstanding loan amount, and so on. Different financial institutions have different regulations and benchmarks with respect to the score.
CIBIL score is like the first impression of the borrower for a financial institution. A person who manages his finances well will always have a higher score. A lower CIBIL signifies that the borrower has low creditworthiness and lenders refrain from giving loans to such applicants.
Did you know? How does a CIBIL score affect your loan eligibility?
Advantages of a Good Credit Score
A high Credit Score leads to several advantages for a borrower. Here are a few key advantages:
1. Credit from Lenders
If an applicant has a good CIBIL score, he may get a loan from a financial institution with a lower interest rate and minimum documentation. However, if the CIBIL score of a candidate is low, the financial institution may reject his application for a loan or offer it at higher rates of interest.
2. Quick Approval
A high CIBIL score states that you have good creditworthiness. Also will repay your loan on time to the lender. Therefore, the financial institution will process your loan faster. The ones who have a low CIBIL Score may have to submit a number of documents and find guarantors making the loan disbursal process time-consuming.
3. Low-interest rate
Those who have a higher CIBIL, get a loan at a lower interest rate than the ones who have a lower one. This is because when one has a higher CIBIL score, the banks trust the borrower more than the ones who have a low one.
4. More Negotiation
For people who have a higher score, the financial institutions will grant loans to them quickly and at a low-interest rate. Therefore, they get more negotiation authority to negotiate with the banks for a lower interest rate.
5. Higher Limit Loans
With a good CIBIL, you may get the loans to the upper limit. Therefore, you should definitely do your CIBIL report check.
6. Easy Approval for Leased Properties
A good credit score assists us to get easy approval for loans even for rented or leased properties. Like commercial complexes, apartments, and so on.
7. Amazing Credit Card Offers
If you have a good score, you may also enjoy credit card offers from various banks. These cards generally have higher limits, more privileges, and amazing offers and cash-backs.
What is your CIBIL score? Check out here.
To conclude
A CIBIL is also known as a Credit score. is a very important factor while applying for a loan. Financial institutions, banks, and other agencies consider this when evaluating the creditworthiness of a person. The higher the credit score you have, the better it is for you. If a person has a low score, it means that he has not been able to pay his bills on time, or has a history of non-payment of bills. A person with a low score might not be able to get the best interest rates from a bank, or might not be able to get a loan at all.
Banks, also as institutions and institutional investors, provide loans to businesses.
For loan applicants, terms like credit score, CIBIL score, and credit report are often highly confusing.
Customers’ loan and credit-related information are gathered from lenders registered with CIBIL, which is additionally referred to as an agency and is employed to calculate CIBIL scores.Credit bureaus calculate a customer’s final credit score supported several factors.
A CIBIL score of 750 or higher is deemed good; anything below that doesn’t reflect well on a customer’s creditworthiness.A CIBIL score differs from a CIBIL report therein a CIBIL score may be a numerical expression obtained from credit information science, whereas a CIBIL report may be a comprehensive document encompassing all credit information.
Credit scores are just numbers that show a customer’s creditworthiness, whereas credit reports are records that contain specific information about their credit history.What is Credit Score?A credit score may be a three-digit figure that represents your financial health or the likelihood of receiving credit.
you’ll review your credit report for any irregularities, and if any errors are discovered, you’ll file a dispute with CIBIL.Credit score and report inaccuracies, on the opposite hand, are uncommon.
Credit score is calculated based on your credit history.
It has the highest weightage of 30% in your CIBIL score calculation.
Check your CIBIL Score today.
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