A CIBIL score is a three-digit numeric that reflects your creditworthiness. The score ranges from 300 to 900, with 300 being the minimum and 900 the maximum. Most banks and other financial institutions will require that their clients hold a score of at least 750. The closer your CIBIL score is to 900, the easier it becomes to avail loans. A good score i.e. from 750 to 900 can help you avail credit quicker and at low interest rates. On the other hand, a poor score may limit your options when it comes to lenders, and institutions willing to lend you loan for bad credit may do it in exchange for high interest.
A good score is important as it simplifies your financial journey. Since our dependence on credit has gone up in recent times, a good score can help avail loans and credit cards much sooner. Your credit score reveals your financial behaviour. Having an excellent score shows lenders that you take payments seriously and that you can be trusted to make repayments on time. A good score is important when it comes to availing personal loan, car loan, home loan, credit cards etc. While it is possible to avail loan for bad credit you can be sure there are some tough strings attached. So to improve your chances of getting your credit application accepted practice the different measures to increase CIBIL score.
An excellent score will help you fetch the best interest rates as well as terms. Banks and other financial institutions tend to charge low rates of interest on those who have a good credit score. You can be sure that if you hold a score of above 750 then lenders will charge you less for borrowing. This is mainly because the institutions consider you less risky compared to those who have poor credit scores. If you have a poor score and are availing loan for bad credit then lending institutions are very likely to charge you exorbitant interest rates as well as stringent terms and conditions. Taking out loan for bad credit will cost you heavily as lenders see you as risky clients. So in order to avoid that situation from occurring, practice the different ways to increase CIBIL score.
It is not just the lending institutions that take an interest in your CIBIL rating. Landlords, insurance companies and employers can also undertake credit checks. Landlords can look at your score to assess whether or not you will pay your rent on time. Some insurance companies use the score to decide on the insurance premiums. Employers can be interested in your credit health checks to see how well you manage your finances. It is to be noted that companies do not conduct credit checks for all positions, just for the top management. Since there are several parties that take an interest in your credit history, make sure to always maintain a high credit score at all times.
If you have a poor score, chances are that you may have come across many offers of loan for bad credit. When lenders present you their offers, be sure to read between the lines to ensure that they are authentic. If a company calls you offering loan for bad credit, look to see if the company has the required license to run the business. Look at the interest rates they are charging. While interest on loan for bad credit generally tends to be high, it should not be more than what other financial institutions are charging. If you wish to avail a loan it is best to wait until your rating moves up so that you get the best deals in the market. However if you have an urgent need of funds, make sure to go through the company history first before entering into an agreement.
If you are looking to increase CIBIL score, there are a number of ways you can do it. Start by first ensuring that all your payments are made on time. Your payment history is taken into consideration when calculating your score. Missing out on a couple of payments will hurt your score. So make sure that your repayments are made on time to increase CIBIL score. The second measure to raise your credit score is by maintaining a low credit utilization rate. When your credit utilization is low, your score will go up. If your credit utilization is high, your score will take a beating. Handle your credit cards wisely and do not simply splurge. To spend only when necessary and financial discipline can help increase CIBIL score. You can also reach out to a reliable credit advisory company who will tell you the different ways to increase CIBIL score. If you have a poor CIBIL rating, they can help you with credit repair and tell you how to avoid bankruptcy. Additionally, they will help you with effective financial planning and financial discipline.