Cibil Score: What It Is & How Banks Use It for Loan Approval

Credit scores, often known as CIBIL scores, are associated with credit cards and loans. You’ve probably heard of the CIBIL score if you’ve ever applied for a loan or used a credit card. We will study the CIBIL score, often known as the credit score, today. In addition, we will examine the extent to which a higher CIBIL score is favorable for a loan.

Does a person make timely payments on his credit bill? Does he also make his loan EMI payments on time? These are used to determine the CIBIL score. It has a range of 300 to 900. This range is used to demonstrate a person’s ability.

It is seen as better the closer it is to 900. Conversely, it is regarded as bad the lower its range. Credit Information Bureau (India) Limited determines this range.

How is the range determined?

A person’s credit score is based on how well they have paid their credit bills thus far. Has he made timely EMI payments on any loans he may have taken out? In a sense, your credit history serves as the foundation for your credit report.

How much higher is the CIBIL score?

300 to 549: A person may have trouble obtaining a credit card or loan if their CIBIL score falls between 300 and 549. You have not made your credit card or loan payments on time if your CIBIL score is in the low range.

549 to 649: The bank or financial institution views this range as favorable. Negotiating an interest rate in this range with the bank is challenging, though. At the same time, the financial institution gives you a loan with a higher interest rate. Additionally, you receive fewer credit card advantages.

650-749: This score is regarded as good. It demonstrates that you have made your credit bill or EMI payments on schedule. On the other hand, people with credit scores between 650 and 749 have to concentrate on raising them.

The ideal credit score is between 750 and 900. These individuals have little trouble obtaining a loan. Credit cards come with a lot of advantages. The interest rate is negotiable with the bank. However, whether or not a bank or other financial institution offers a loan with a low interest rate will depend on its policies.

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