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We all know how important it is to have a good CIBIL score to get a loan. In today's time, most people fulfill their needs by taking a loan. While taking a loan, banks decide whether you should be given a loan or not by looking at your CIBIL score. If you have to be given a loan, then at what rate should the interest be charged?
Let us tell you that the CIBIL score ranges from 300 to 900. CIBIL score is also called credit score. The higher the credit score, the more reliable the bank considers you as a customer. In such a situation, the loan is easily available and at a lower interest rate. On the other hand, if the CIBIL score is low, then it becomes difficult to get a loan and even if you get it, the interest rate is very high. Let us tell you that if you take a home loan or any other loan related to home from State Bank (SBI Home Loan), then at what CIBIL score can you get a loan at how expensive or cheap interest?
How is credit score determined?
There are many factors that go into determining your credit score like loan repayment history, credit history, credit utilization ratio, credit mix, etc. Apart from these, your CIBIL score is calculated from other factors like incorrect information in your credit report, whether you have done loan settlement in the past, if you are a guarantor for someone's loan and are not repaying it, etc. All these factors also affect your CIBIL score and can affect your score.
Who prepares the CIBIL score?
Several credit bureaus issue CIBIL scores. The major ones are credit information companies like TransUnion CIBIL, Equifax, Experian and CRIF Highmark. These companies are licensed to collect and maintain financial records of people and create credit reports/credit scores based on this data. These credit bureaus evaluate customer data submitted to banks and other financial institutions such as outstanding loan amounts, repayment records, applications for new loans/credit cards and other credit-related information etc. and prepare the CIBIL score based on that.
