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Credit score is important for everyone. It also has many advantages and disadvantages. Credit score is very important to find out the credit history of a person. If your credit is bad then it can bring many problems for you. At the same time, there are many benefits of good credit or CIBIL score. Therefore you should try to maintain your credit score. If your credit score is good then the lender is confident that his money will not be lost. In such a situation, you also get a loan easily. Let us know why it is important to maintain credit score and what are its advantages and disadvantages.
To take loan, CIBIL score should be –
CIBIL score gives information about previous loans. Therefore, to get loan and credit card from the bank, it is important to have a good CIBIL score. Regular loan payments keep your credit score good. CIBIL score ranges between 300 to 900 points. It is easy to get a loan if the score is 750 points or more. The better the CIBIL score, the easier it will be to get a loan. CIBIL score is prepared on the basis of 24 months credit history.
Why is credit score important?
CIBIL score reflects credit history.
Banks look at the CIBIL score of the loan applicant.
The credit behavior of the applicant is checked.
A credit score provides a blueprint for paying off existing debts and bills.
Credit score range is between 300 to 900.
If the score is 700 or more then banks consider it good.
What are the benefits of a good credit score?
Easy to get loan: If your credit score is good then it is easy to get loan. For this you do not need to wrestle much. With the help of credit score, you get a loan without any guarantor.
Loan can be available at affordable interest rates – Along with easy access to credit, you are also likely to get loan at low interest rates.
You can get a loan for a long period – If you are taking a loan of a higher amount then it may be possible for you to get a loan for a long period if you have a good credit score.
Loan request approval – If you maintain your credit score, your loan request may get approved quickly if needed.
Waiver on loan processing fees and other charges – With the help of a good credit score, your loan processing fees and other charges can also be reduced.
How does a credit score deteriorate?
In case of non-payment of loan on time,
On taking loan in excess of credit limit,
On loan default,
On settlement of the debt,
On becoming a guarantor.
What if my CIBIL score is low?
If the CIBIL score is low then there will be problem. If you have applied for a personal or business loan then you will face difficulty in getting the loan from the bank. Loan approval/rejection depends on credit score. If the score is low, the chances of the loan being rejected are high. Low score also affects the loan amount.