CIBIL SCORE

 

What is a CIBIL score?

A CIBIL score is a three-digit number that ranges from 300 to 900. It assesses your ability to repay the borrowed amount. A perfect score would be between 750 and 900. To get better access to credit products like credit cards and loans, your score should be closer to 900. If you have a high score, it indicates that you have been a responsible borrower.

 

The Importance of the CIBIL Score

The CIBIL score is an important factor that lenders consider when offering you a loan or credit card. It is a numerical representation of your credit history and repayment habits.

 

What factors make up your CIBL score?

 

Your score is mostly determined by four factors:

30% Payment History

25% Credit Exposure

25% of Credit Type and Duration

20% Other Factors.

 

What are the factors that have no bearing on your CIBIL score?

Aside from payment history and credit exposure, many other factors influence your credit score. Some factors, however, will have no effect on your score. Here's a list of some of them:

Examining your personal credit score

Account for Savings

Term Deposit

Debit card

Income

Overdraft

The cheque bounced

Education

 

Why is the CIBIL score important? 

Your score is a snapshot of your creditworthiness. Lenders can know your ability to repay the amount borrowed.

 Know your Credit Status:

 Checking your scores and reports will give you an idea of ​​where you are and what you need to focus on. A CIBIL report is a summary of current and historical margin transactions. By reviewing your report regularly, you can also  report and correct discrepancies that lower your score through no fault of your own.

Makes you Eligible for Loans

 In general, financial institutions and lending platforms consider a CIBIL score of 750 or higher to be ideal. Therefore, it is important to build your credit history and get your score. This increases your chances of applying for a loan on favorable terms. Lack of credit history and score makes it  difficult for lenders to assess  creditworthiness.

 

What are the benefits of a high CIBIL score?

 Low interest rates on loans

 Cards with lots of perks and rewards

 Use pre-approved credit

 Long term loan

 Fast Approval of Loan Applications

 Bargaining power

 Discounts on loan processing fees and other fees

 High credit card limit.


                                                                                                  BY

                                                                                                  Anantha Srivatsava

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