A credit score is well defined as a 3-digit number, It ranges between 300 and 900. It describes the cardholder who has taken a loan but to grant a loan in India, financial institutions and banks prefer a credit score. It is provided by a few institutions in India. These are as follows- Equifax, Experion, and the CIBIL score. The model of credit score was introduced by Fair Isaac Corporation, which is also known as FICO and It is used by financial institutions and banks. Although the other credit scoring system exists the most commonly used system is FICO in India. There are multiple ways to improve your CIBIL score. A good CIBIL score consists of various benefits as well and It also leaves a positive image in the eyes of the banks and the financial institutions. It may lead to humongous benefits in your financial life. A credit score has the ability to significantly affect your financial life. Therefore you need to understand the process of a good credit score as well as the demerits of having a low credit score.
A good credit score is important because the Bank’s and the financial institutions’ first priority is to check the CIBIL score when you apply for a loan or a credit card. It provides the institutions with a clear idea of your creditworthiness. Good credit points lead to humongous benefits. It can positively affect your financial life. Also, it helps financial institutions to make decisions efficiently and effectively. Therefore, you should make sure your credit score is closer to 900. The closer the score is, the better it is.
Profits of a Good credit score.
A good credit score has its own benefits. Some of the benefits of a good CIBIL score are:–
Rapid approval of the loan
Many Institutions and banks pre-approve the loan of the consumer who has a high credit history and CIBIL score closer to 900. Rapid loan approval is one of the best advantages of a good credit score.
Eligible for loans and credit cards
A good credit score makes you eligible for getting a loan and credit card. So does it indicates that you have been repaying all your debts on time and also shows that you have experience in credit handling. It provides a good reason for banks and financial institutions to offer you a loan.
A good CIBIL score has a huge benefit and one of the benefits is that banks and financial institutions might offer a loan with lower interest rates. Considering your credit handling experience and history. It also increases the high possibility that you might get a discount on the interest rate for loans.
Increases the value of visa application
A good credit score increases the value of your visa application. The income tax records are an important consideration. Hence, a good CIBIL score adds momentum to the visa applications.
Increases the credit card limit
A lower rate of interest is not the only thing that a good credit score provides but will also help in acquiring a higher amount of loan. A poor CIBIL score results in lowering the credit limit. A good credit point implies that you are creditworthy. It shows that you have credit handling experience. It provides you with a higher credit limit. A good CIBIL score leads to humongous benefits. A CIBIL score has the ability to significantly affect your financial life.
Ways to score a good credit score
There are various ways through which you can increase your credit point. Enjoy the benefits of a good CIBIL score and know more below:-
Repaying all EMIs and bills on time
Repaying the EMIs and bills on time leads to an increase in the CIBIL score and helps the banks and the financial institution to take a clear decision about whether you are creditworthy at the time of applying for new best credit cards loans. A good CIBIL score has the ability to positively affect your financial life.
Avoid taking many loans at one time
Try to take minimal loans in a fixed period of time. After paying the one loan and then you can apply for another loan. It will help your credit points from crashing. Moreover, multiple loans at the same point in time will create a negative image in front of the financial institutions. In return, the banks will hesitate to provide you with a loan.
Customize your credit limit as per your preference
The usage of a credit card leaves a remarkable impact on your score. Therefore you need to be able to restrict the usage of credit. The better it is for your credit points. Reaching out the limits works oppositely and leads to lowering your credit points. So, it’s better to customize your loan limit in order to achieve a good CIBIL score. Your score has the ability to significantly affect your financial life. Therefore, It is suggested to keep your score closer to 900. The closer your score is to 900, The better It is for your financial life.
Check the credit score regularly and rectify the mistake
Checking out the points and rectifying the mistakes regularly leaves a massive impact on scoring good credit points. Therefore, you should check your score from time to time. You can make a CIBIL score login to stay updated with your credit score and report. So that credit scores may not decrease. However, it leaves a negative remark in front of the financial institutions. It also causes trouble while applying for new best credit cards and loans. Therefore it has the ability to badly affect your financial life.
Continue mentoring the older credit cards
If you have an old credit card, ensure to continue them for a long period of time to pay your bills, on time. This will help you build a long credit history and so will increase your credit handling experience. Therefore, it will leave a positive image in front of the financial institutions. It will describe your creditworthiness as well while you applying for the new best credit cards and loans. A good CIBIL score will significantly and positively affect your financial life.
Also read: How long does It take to raise your CIBIL score?