If you are going to apply for a loan or credit card, the lenders will check for your CIBIL Score for sure before extending loan or issuing a credit card to you. Your CIBIL Score matters a lot in taking any kind of credit from any bank or financial institution.
Credit Information Bureau of India Limited (CIBIL) is the first credit bureau in India, out of 4 credit bureaus, which calculates the credit score of an individual based on credit related data received by different lenders such as banks or financial institutions. How does CIBIL Score work? The credit score calculated by SBIL is called TransUnion CIBIL Score. CIBIL Score is a 3-digit number and cibil score range in india 300 to 900. Higher the CIBIL Score, better are the chances of your availing the loan. Where to check Cibil score? You can check your CIBIL Score here.
CIBIL Score more than 750 and closer to 900 is considered as very good CIBIL Score.
(1) Better Chances for Approval of Loan and Issuance of Credit Card
Good CIBIL Score offers you a very good chance of being approved for a credit very easily by the lenders. Though a good CIBIL score is not the only factor considered by the lender for extending you a credit, there are certainly many other factors that impact on your credit approval like your income, employment status, type of loan, debt taken by you, etc.
(2) Lower Interest Rate on Credit
With good CIBIL Score, you are offered lower interest rate on the loan that your are availing. As with higher credit score, your creditworthiness increases.
(3) Quick Processing of Loan
As the lenders check your CIBIL score as their first step of loan approval process. If you are having a good CIBIL score, your loan application will get approved quickly and in a hassle free manner.
(4) Higher Amount of Loan
With good CIBIL Score, you can be sanctioned higher amount of loan as compared to a person applying for the loan with lower CIBIL score. If you posses a good CIBIL Score, lenders will always want to offer you more loan amount as they will find it safe and secure to lend you based on your creditworthiness reflected by your credit score.
(5) Greater Negotiating Power
Good CIBIL Score gives you greater negotiating power that can be used with your lenders. In such case, you can easily negotiate with them on rate of interest, duration of the loan, loan amount, etc. very easily and with confidence.
(6) Higher Loan Tenure
You can get a higher tenure of your loan with good CIBIL Score.
(7) Lower or No Security Deposit
Having a good CIBIL Score, no security deposit is required on getting mobile phones. In some cases, even if security deposit is required mandatorily, you need to pay lower amount towards security deposit.
(8) Loan on Favorable Terms
The higher the CIBIL score, the better are your chances of availing the loan or credit card not only in a faster manner but also on favorable terms and conditions.
(9) Waiver of Processing Fees or Administration Charges
Many lenders may be ready to waive of the processing fees, chanrges on prepayment or other aministration charges depending on your negotiation with them on having a good credit score. However, it also depends upon the lenders' willingness and other credit guidelines.
(10) Availability of Loan from Multiple Lenders
A person having a good CIBIL Score is offered loan facility by various banks/ lenders as they also want to extend the credit to such individuals who are more credit worthy in order to lower their risk exposure.