CIBIL scores are considered to be an important element when it comes to borrowing credit. Having a good CIBIL score can help you avail credit in an easier manner. A credit score is a metric that helps banks and lending institutions assess your creditworthiness and other financial habits. The credit score impacts several credit facilities and gives the lenders insights into your financial patterns and repayment capabilities. Let us have a look into CIBIL scores and how having a high CIBIL score can ease up the process of availing an affordable personal loan.
What is a CIBIL Score?
The CIBIL score is a 3-digit number that helps determine the creditworthiness of an individual. CIBIL scores range between 300 and 900 with 300 representing a poor credit history. It is usually recommended to have a credit score of 750 or above so that you can borrow credit in a hassle-free manner. Depending on the lender, the credit score requirement can vary. Every lender will check your credit score before offering you any credit. So, it is important to have a good CIBIL score to be eligible to avail credit.
Why is a Good CIBIL Score Important?
Your credit score determines so much more than the loans you can avail. It can also help determine the interest rates you need to pay. This score can help banks and lending institutions understand your financial aspect on a whole including your credit repayment habits and how likely you are to repay the borrowed credit amount. So, having a good credit score shows lenders that you can be trusted with credit and that you will repay in a timely fashion.
How Can a High CIBIL Score Help You Get an Affordable Personal Loan?
Having a high credit score can help banks understand how credit worthy you are. A high score translates to good repayment habits thereby improving the likelihood of getting a reduced interest rate on a personal loan. This makes personal loans affordable for many.
If your current credit score is not high, don’t worry. There are many ways in which you can improve your credit score. The following types of credit behavior can help you have a high credit score.
- Timely payment of EMIs
- Paying credit card bills regularly
- Increasing the limit of your credit card when you get a chance
- Keeping your credit utilisation ratio low
- Applying for new credit when needed and not all at once
- Borrowing after budgeting your current finances
- Not having plenty of existing debt
With such habits, your credit score is bound to increase. With an increased credit score, you are more likely to be eligible for affordable personal loans.
In a Nutshell
Now that you have understood the importance of a credit score, it is important for you to maintain a good score. It can help you avail personal loans at an affordable rate. You can avail of personal loans online on Finserv MARKETS and experience several benefits such as flexible repayment tenures, attractive interest rates, and minimal foreclosure charges.