Cibil Score: What Is It And Why Is It Important?

Your future contacts with lenders and financial institutions are directly influenced by the Credit Information Bureau India Limited (CIBIL), which controls your credit score. Your creditworthiness is quantified by your CIBIL score. The three-digit number falls between 300 and 900. You can be eligible for greater credit card and loan offers if your credit score is 900 or higher. The majority of lenders, including banks and non-banking finance companies (NBFCs), want a CIBIL score of 750 or higher.

Your future contacts with lenders and financial institutions are directly influenced by the Credit Information Bureau India Limited (CIBIL), which controls your credit score. A good credit score can ensure that your loan or credit card application is approved quickly, but a bad credit score will limit your chances now and in the future. We frequently struggle to maintain a respectable credit score because of our ignorance of the subject. We put ourselves in difficult positions due to our ignorance, especially during trying times. Because of this, we at Bajaj Finserv have put together a list of five essential qualities that will help you establish and maintain a solid financial history.

Importance of CIBIL Score

A CIBIL score is a three-digit figure that represents your level of creditworthiness. Lenders look at it first when a borrower applies for a loan or credit card. It gives them a clue as to whether you’ll be able to pay back the loan on time. So, it’s important to keep your credit score high. You can maintain your credit score by making all your payments on time, checking your credit reports periodically, paying off any current credit card debt, and maintaining your credit utilisation rate under 30%.

If they have a good or excellent credit score, most people will save hundreds of thousands of dollars over the course of their lives. For those with good credit, mortgages, car loans, and other types of financing are more inexpensive. More banks are competing for their business by offering higher rates, fees, and bonuses because customers with better credit scores are lower-risk customers. On the other hand, customers with poor credit are riskier, which results in fewer lenders competing for their business and more businesses getting away with charging illegally high annual percentage rates (APRs). Additionally, having a low credit score may make it challenging to acquire rental accommodation because your credit score affects your ability to obtain life insurance, rent a car, and other types of credit.