What is the CIBIL score and why it is much important?
CIBIL is nothing but the Credit Information Bureau (India) Limited, is the first credit information company in India. So let’s discuss what is CIBIL score and why it is much important.
CIBIL is licensed by the RBI (Reserve Bank of India) and governed by the Credit Information Companies Regulation Act, 2005.
It generally collects the credit records of individuals and maintains them to help banking institutions/financial institutions to manage their business and be helping customers secure credit on fair terms.
CIBIL plays a major role in India’s financial system.
A CIBIL score is a three-digit numeric summary of one’s credit history.
The credit score normally ranges from 300 to 900.
One must maintain a good credit score to avoid unwanted issues.
What is the best CIBIL score range:
If you are planning for a loan, make sure that you have a good credit score (>750) to gets approved quickly.
Advantages of CIBIL Score:
A good credit score helps you to get the loan at a lower interest rate.
A CIBIL credit score takes time to build up and usually, it takes between 18 and 36 months or more of credit usage to obtain a satisfactory credit score.
Generally, most of the financial institutions consider the CIBIL score of 750 and above is good enough for any credit card/loan approval.
Below are the benefits of having a good CREDIT score:
Get the quick eligibility for the loan
Discounted interest rate – Lesser interest rate
Quick loan approval
you can negotiate for a better deal
The higher credit limit on credit cards – One can available credit cards with a higher credit limit.
Credit card with better benefits and rewards – One can avail super benefits withholding good credit history.
Loans with longer tenure – One can avail of a good amount of loans with longer tenure.