A Credit score is a three-digit number that is assigned to you by credit bureaus in India. Some of the credit bureaus in India include — TransUnion CIBIL, Experian, Equifax, and CRIF High Mark. These credit bureaus take into account your current and past credit activities to generate your credit score. The credit score generated by TransUnion CIBIL is known as the CIBIL score. Having a high CIBIL score can entitle you to numerous advantages. While having a low CIBIL score can even make it difficult for you to obtain credit.
Whenever you apply for a loan or a credit card, banks and other financial institutions check your CIBIL score before approving the loan or credit card application. Banks consider applicants with a high CIBIL score as creditworthy. While applicants with low CIBIL scores are considered risky applicants and are most likely to default on their loan repayments. Therefore, it is important to have a high CIBIL score to obtain loan approvals and to gain other benefits that come along with a high CIBIL score.
GroMo is one of the leading fintech applications in India that enables you to check your CIBIL score and keep a track of your credit health. Moreover, it is also advisable to check your CIBIL score before applying for a loan or credit card to avoid rejections. Usually, having a CIBIL score of 750 or higher is considered good. Also it boosts your chances of getting approval on your loan application. Having a good credit score indicates responsible credit behaviour and good repaying habits.
5 Major Benefits Of Having A High CIBIL Score
Having a high CIBIL score is necessary to take advantage of all the benefits that come along with a high credit score. Some of the common benefits of having a high CIBIL score are as follows:
1. Faster Loan Approvals
Having a high CIBIL score can boost the chances of getting loan approvals. A Higher CIBIL score represents that the applicant has a clean record of previous debt repayments. Therefore, banks consider such applicants as creditworthy and less risky. Furthermore, this boosts your chances of getting approval on your loan application.
Whenever you apply for a loan or credit card, the banks and financial institutions check your CIBIL score. It is done to make sure that you do not have any previous credit default history. Also, to make sure that you would not default on your loan or credit card. Having a high CIBIL score makes sure that the applicant has a healthy credit history and is less likely to default on the loan.
2. Lower Loan Interest Rates
Banks in India have started to determine loan interest rates according to the creditworthiness of the applicant. Banks consider CIBIL score before determining the interest rate on your loan application. Applicants with a higher CIBIL score tend to have lower interest rates in comparison to applicants with a lower CIBIL score. Having a low-interest rate on personal loans and home loans can be beneficial in the long term.
Moreover, it can help in saving a lot of money that you would otherwise end up paying as interest on your loan amount. Even the slightest percentage of difference in the interest rate can create a huge difference in the total loan amount for a long tenure. Therefore, it is advisable to have a high CIBIL score and then apply for a loan to get the best possible interest rates.
3. Increased Loan Limits
Banks consider your CIBIL score before determining your loan amount. Applicants that apply for high amounts of loans are usually considered risky by banks. Borrowing huge amounts of money would require the applicant to have a high CIBIL score. In other words, the amount of loan approved for an applicant with a low CIBIL score would be much lower than that of an applicant with a high CIBIL score.
GroMo advises you to keep an eye on your CIBIL score before applying for a loan to make sure that you have a high CIBIL score at the time of loan application. You can apply for higher amounts of loans with a high CIBIL score and can get approvals on your loan applications.
4. Higher Credit Card Limits
Similarly, credit card limits are also determined by your CIBIL score. Banks and other financial institutions consider your CIBIL score before determining your credit card limit. An applicant with a low CIBIL score is more likely to default while repaying credit card dues. Rather than an applicant with a high CIBIL score. GroMo enables you to check your CIBIL score free and then apply for a credit card to have a higher limit on your credit card.
5. Longer Loan Tenure
CIBIL score is the major factor considered by banks while deciding whether to approve or reject a long-tenure loan application. Loans with longer tenure like home loans usually require a lot of documentation and it is considerably difficult to get approval for a home loan. However, having a high CIBIL score can make you look like a creditworthy applicant who is less likely to default on loan repayment installments.
Therefore, it is advisable to always check your CIBIL score and credit report before applying for a long-tenure loan to get approvals. However, if you apply for a home loan with a low CIBIL score, then it is most likely that the banks will directly reject your loan application.
These are the 5 major advantages that come along with a high CIBIL score. However, if you are looking forward to applying for a loan or credit card. Then it is advisable to check your CIBIL score and make sure that you have a high CIBIL score at the time of application. Moreover, if you have a low CIBIL score, then also you can take the necessary steps. These steps are to improve your CIBIL score before applying for a loan to boost your chances of getting approvals. Having a high CIBIL score makes it easy for you to avail of various financial services.
You can check the steps to improve your CIBIL score on the official GroMo website and boost your chances of loan approval. GroMo is a leading fintech application in India that enables individuals to sell financial products using the application and earn commissions. You can download the GroMo application today from the Google Play Store or App Store. After which you can register to become a GroMo Partner and earn commissions for every successful sale conversion.
What is advantage of high CIBIL score?
CIBIL score is an indicator of your creditworthiness in front of the banks. It allows your bank to decide whether to approve or reject your credit application. Having a high CIBIL Score can enable you to get access to quick funds when you are in an emergency.
What happens if CIBIL score is high?
You can get instant loan approvals to higher loan amounts when you have a high CIBIL Score. Also, the interest rate charged on your loan application would be much lower than the interest rate charged to an applicant with a low CIBIL Score.
How good is 750 CIBIL score?
Very Good, but it can be even better. A CIBIL Score of 750 comes with numerous benefits. However, there are banks in India that require a CIBIL Score of 800 or above. Therefore, it is advisable to elevate your score above 800 to gain the most benefits.
What is the benefit of having a credit score over 800?
Having a CIBIL Score over 800 can get you instant loan approvals for higher credit limits at lower interest rates. You can also increase the limit on your credit card when you have a high CIBIL Score.
Does age affect CIBIL score?
Your age may appear to be a crucial factor in acquiring a loan or credit, but it has no influence on your credit score.