Availing of loans can be a convenient of securing funds to meet housing or personal requirements. While extending loans, lenders assess an applicant's eligibility based on several factors such as age, income, and employment type, among others. One of these significant factors is your CIBIL score – a three-digit numeric summary reflecting your credit behaviour. A high credit score, typically above 750, is preferred by the lenders. If your credit score is below 750, take corrective measures to improve it before applying for a loan.
In this article, we discuss the benefits of having a good credit score.
Here’s How a Good CIBIL Score Can Prove Beneficial
1. You Can Get Approved for a Loan Quickly
A high CIBIL score demonstrates your creditworthiness. Applicants with a high credit score are seen as responsible borrowers who are unlikely to default on EMI payments. This can improve the chances of getting approved for a loan quickly. Moreover, a strong credit profile can enhance your ability to negotiate better terms such as lower interest rates and higher loan amounts.
2. You Can Get Offered a Better Interest Rate
When it comes to loans, especially big-ticket loans, such as a Home Loan or a Loan Against Property, the interest rate is the key factor that determines the feasibility or the cost-effectiveness of the loan. Low interest rates not only make the Home Loan EMIs manageable but also allow borrowers to save on the interest outgo. Lenders can extend low-interest-rate Home Loan deals to borrowers who have a good CIBIL score, preferably above 750.
3. You Can Access a Higher Loan Amount
Having a good CIBIL score enhances your access to higher loan amounts primarily because it indicates a strong credit history. Borrowers with a high credit score are likely to repay borrowed funds responsibly. As such, lenders can offer higher loan amounts to borrowers with good credit scores.
4. You Can Negotiate for Better Terms
Borrowers with a CIBIL score of 750 or above are in a good position to negotiate for better loan terms such as low interest rates and higher loan sanctions.
5. You Can Get Access to Exclusive Offers
Banks and financial institutions may offer you higher credit limits on credit cards or approve your application for premium credit cards with exclusive benefits and rewards.
Final Words
With a CIBIL score of 750 or above, you can have a better chance at securing loans and credit cards are feasible terms. However, in case your CIBIL score is below the ideal score, you can try improving it by paying credit card bills and EMIs on time, maintaining a low credit utilisation ratio, keeping a check on your co-signed loans, and checking your credit reports for errors regularly.
Also Read: Tips to Maintain Your Business CIBIL Score Above 700
DISCLAIMER:
While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent errors or delays in updating the information. The material contained in this website and on associated web pages, is for reference and general information purposes, and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. Neither Bajaj Housing Finance Limited nor any of its agents/associates/affiliates shall be liable for any act or omission of the Users relying on the information contained on this website and on associated web pages. In case any inconsistencies are observed, please click on contact information.
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