Why is it Important to Check your CIBIL Score?

A credit score is a statistic that determines how much money you can borrow. People who have had credit for at least 6 months to a year have a credit score, which in India runs from 300 to 900. A credit score of 750 or more is considered exceptional. A score of 700-750, on the other hand, will be considered adequate. A score of less than 650 points, on the other hand, is considered poor. Lenders will check their credit ratings when they apply for a loan or a credit card. Before applying, you should do a quick credit check. When you verify your Score on the credit bureau’s official website, you are conducting a soft inquiry. It can reduce your online CIBIL score slightly, but only minimally.

When to Check Your Credit Score

If your credit score is low and you have previously filed an application without checking it, you should do so again. The lender may refuse the loan, credit card, or other application. In other situations, though, a frequent credit score assessment may be required. Below are some of the few conditions where you need to check your credit score. Those conditions are as follows:

Before Taking out a Loan or Applying for a Credit Card

Before applying for a loan or credit card, you should run a credit check. Because it influences the likelihood of earning credit. If your credit score is 750 or higher, your loan or credit card application may be approved quickly. If it’s low, you’ll need to check your credit report to figure out why. Credit ratings are frequently low due to nonpayment of credit card bills and loan EMIs. As a result, if you have a low credit score, you should work on improving it before applying.

Before you Switch your Current Loan

Check your credit score before moving your current loan to a different lender with a cheaper interest rate. If you have excellent credit, you may be able to negotiate a lower interest rate. Check your credit score after completing the transfer to see if it has changed. A hard query is conducted on your credit record every time you apply for a loan. If the lender rejects the application, each hard inquiry has the potential to impair the credit score.

Loan Repayment

For example, paying off a loan could be a huge relief. But do you know how it will affect your credit score? It all relies on your credit history and the credit organisation with which you are dealing. If the portfolio is largely unsecured, a credit mix with more secured loans may help to increase credit ratings.

Following Debt Settlement

When a lender and a borrower agree on a lesser payment than the original loan amount, they have struck a debt settlement agreement. You are no longer liable for the debt, but it will be marked as settled on your credit report. If you have enough money, you can remove the tag if you pay off the entire amount in the future. You can request payment of the overdue amount at the lender’s branch. After that, you’ll be able to view your credit report and compute your credit score.

Pros of Having A Good CIBIL Score

Following are some of the benefits that come along with a good CIBIL score. However, having a high credit score does not necessarily mean that you can always have a high credit score. You need to follow some steps in order to maintain your credit score. Moreover, it is advisable to make a CIBIL score login in order to keep a regular check on your credit score as well as report. The advantages of high CIBIL score are as follows:

Lower interest rates

A good credit score qualifies you for a low interest rate because it shows the lender that you are capable of managing your debt.

Attractive Credit Card Discounts

If your credit score is good, lenders will issue you a credit card with many rewards, such as high cash back and points on online and offline transactions, enticing dining specials, and travel bonuses.

Swift Authorisation

Loans and credit cards are authorised more quickly when your credit score is excellent.

Negotiate with your lender

If you have a good credit score, you may be able to negotiate an increase in your loan limit or a lower interest rate with your lender.

Create a positive credit history

It contributes to the stalemate.

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