Maintaining a good credit score is critical these days, especially if you’re planning to apply for a loan to meet an expense. Funding the purchase of a new car, home, or even a new phone might not always be easy without some financial assistance. Many people choose a personal loan, credit cards, etc., to ensure that they can spend on things that they wish for. Herein, a person’s CIBIL score becomes the main determinant to keep these material wants flowing.
Here’s all that you need to know about the CIBIL score:
What is a CIBIL score?
CIBIL score, also known as a credit score, is a figure that is calculated to define a person’s credibility for loans. The three-digit number can be anywhere between 300 and 900. Lenders and credit card providers check an individual’s score before lending them money.
A good CIBIL score falls between 750 and 900. The closer a person is to the 900 mark, the better are the chances of his/her loan application being approved. A credit score is essential for all types of loans, like a personal loan, education loan, etc.
Additional Read – CIBIL Score Myths Debunked
Why is a CIBIL score important while applying for a loan?
A credit score can have many benefits when applying for a loan. Here are some:
- It offers good interest rates: Home, marriage, and even student loan interest rates are decided depending on the loan applicant’s credit score. A high score makes a person a better candidate. Sometimes lenders also offer additional discounts or waive off some fees for applicants with a high score. One must aim to maintain a decent score at all times.
- It is easier to get a big loan: It can be hard for someone with a low or moderately average CIBIL score to get a significant loan amount. The higher the sum, the more difficult it is to repay the loan. Therefore, individuals in need of considerably high funds such as a housing loan must maintain a steady score.
- Faster loan approval: The willingness of the lender to approve a loan and to do so quickly depends on the creditworthiness of the loan applicant. For people with a good score, the approval process is relatively quick. One has to submit the necessary documents, and the funds are credited to his/her account in the stipulated time. People with a low score, on the other hand, may have to go back and forth, negotiating interest rates and tenures.
Additional Reads – Top 4 Things You Should Know About CIBIL Score to Get a Personal Loan
The CIBIL score plays a crucial role in a person’s financial goals. Whether it is a well-planned travel loan or an unexpected medical loan, the one thing that can ensure that nothing comes in the way of a person’s monetary needs is a high credit score. Individuals must make sure to always pay their credit card bills and EMIs on time and keep a check on the credit score, so they are able to improve it if it ever starts to fall.
For all your loan requirements, reach out to Tata Capital and enjoy the best things in life without having to worry about the finances.