CIBIL Score: A credit report known as CIBIL Score plays an important role for every Indian citizen for their loans. How to raise it can be found in this post. Credit report called CIBIL Score plays an important role for every Indian citizen for the loans they buy. How to raise it can be found in this post.
CIBIL score plays an important role while sanctioning loans to borrowers in the country. Having a low CIBIL credit score makes it difficult to get a loan. This makes it almost impossible to get a loan. CIBIL score shows the creditworthiness of a person and his credit history. Meanwhile, here’s how to maximize your CIBIL score:
How to increase CIBIL score and maintain it?
Having a good credit score is important for getting a loan or credit card from any bank. Some important tips for that
Steps 1. A good CIBIL score should have a credit utilization ratio of 30 percent. If you are struggling to stay within the limit of your existing card, it is advisable to get a credit card with a higher maximum limit.
Steps 2. Repaying loans or credit card balances has a huge impact on your CIBIL score. Therefore, any loan or credit card dues should be repaid on time to maintain a good CIBIL score.
Steps 3. It is advisable to diversify the loan portfolio with a good mix of both secured and unsecured loans to get a higher CIBIL score. A credit card is an unsecured loan. Whereas a home or car loan is a secured loan.
What is CIBIL Score?
CIBIL Score is a three-digit number ranging from 300 to 900. The higher the score in this the better. Generally, if you have a score above 750 in India, chances of loan approval are high. A report containing this score is called a CIBIL report.
A CIBIL report allows a bank to look at a person’s credit history, including whether the person has ever defaulted on his previous loans. It shows all the banks the history including how many loans the person has taken so far, including the amount and duration of previous credits. This helps the banks reduce the risks of default and thereby reduce losses.
CIBIL Score and Credit Ratio
Apart from easy loan approval, a good CIBIL score helps borrowers get cheaper loans. For example, in home loans, State Bank (SBI) offers loan rates based on the borrower’s credit score. It offers conventional home loan at 9.15 per cent for CIBIL score above 750, 9.35 per cent for 700-749 and 9.45 per cent for CIBIL score 650-699. People with CIBIL score 550-649 can avail home loan at 9.65 percent.
