Quite often, getting a loan is considered a huge hassle! People imagine themselves going through extensive paperwork, verification of several forms and running around to ensure that their details are in order. Though the influx on online banking has streamlined the process; nevertheless a bad credit score (CIBIL score) can often act as a deterrent in your loan approval process. Banks today have become stringent regarding loan applications and a good CIBIL score can go a long way in obtaining that loan.
Credit Information Bureau (India) Limited or CIBIL as it is commonly referred to is India’s first Credit Information Company. The CIBIL Score acts as a gateway for credit institutions to determine how likely an individual are to default on his/her payments. It tells an institution how likely someone is to pay back a loan based on past patterns of credit usage and loan repayment behavior.
Incase, an individual has made a default on his credit card bill or over exceeded his credit limit several times in the past then the credit score often faces a beating.
Below we list a few advantages of maintaining a good credit score.
With a good credit score you can be rest assured that applying for a loan, won’t be a hassle in the future. According to the official CIBIL website, about 90% of loan applicants with CIBIL score greater than 700 often obtain easy approval for loans.
Higher the CIBIL score lower the interest rates. A good CIBIL score will grant you the power to negotiate; hence you much have a better chance at getting lower rate of interest on your loans and credit cards.
Banks and financial institutions are favorable to individuals with a good or high CIBIL score. Hence over the time it becomes far easy for to get approval for higher limits from the bank or financial institutions.
Be rest assured that the next time you require a home loan, mortgage loan, personal loan, car loan or any other type of loan, the process will be smooth. If the credit score is high, the lender will easily consider the application and move on to evaluate other factors before approving the application.
Keep these aspects in mind and get your credit scores in order.
Happy Investing!