A good CIBIL score indicates a high level of creditworthiness & financial responsibility. Thus, one must ensure that they maintain good CIBIL scores at all times.
TransUnion CIBIL, one of India’s most reputed credit bureaus analyses every individual’s and entity’s credit behaviour through data obtained from financial institutions and assigns them a 3 digit score between 300 to 900, also known as CIBIL score.
Most lending institutions insist on a strong credit score so that they can be assured of the loan amount being repaid without default.
Here are the ways how high CIBIL scores can help a personal loan borrower:
A high CIBIL score indicates a very high level of financial responsibility, repayment capacity & history, and very low credit utilisation, thereby indicating a high probability of the applicant repaying the loan as per the agreed upon schedule. Thus, a good CIBIL score significantly reduces chances of rejection.
With a high CIBIL score, one may be able to negotiate better terms on personal loans, such as lower interest rates, higher amounts, etc.
A Personal Loan application from one with a high CIBIL score often gets approved quickly, especially if they provide the required documents and meet the other eligibility criteria.
Many lenders provide pre-approved loan offers to those with CIBIL scores higher than 750, at excellent terms and quick disbursals.
Providing they meet the other required criteria, applicants with high CIBIL scores may be able to borrow higher amounts.
Healthy financial habits and disciplined repayment of your loan can help you improve your CIBIL score. With time and practice, you should be able to maintain it at 750 or above.