Why is CIBIL Score Important for Personal Lending?

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Overview

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.

What is CIBIL Score?

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.

Importance of 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:

1. Creditworthiness:

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.

2. Better Terms:

With a high CIBIL score, one may be able to negotiate better terms on personal loans, such as lower interest rates, higher amounts, etc.

3. Quicker Approval:

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.

4. Pre-Approved Loan Offers:

Many lenders provide pre-approved loan offers to those with CIBIL scores higher than 750, at excellent terms and quick disbursals.

5. Loan Amount:

Providing they meet the other required criteria, applicants with high CIBIL scores may be able to borrow higher amounts.

Maintain CIBIL Score

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.

Having High CIBIL Score? Apply for a Personal Loan


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* Please note that this webstory is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us