CIBIL Score: What is it and why is it important? Key questions answered
A CIBIL score is a numeric representation of creditworthiness of borrower or investor. It is based on the individual’s credit history and repayment behaviour.
The CIBIL score typically ranges from 300 to 900 with a higher score reflecting better creditworthiness. Almost all banks deploy this score as a yardstick to evaluate the risk in lending money to an individual.
Credit limits: A good CIBIL score usually leads to higher credit limits on credit cards, overdraft limits and other lines of credit. Banks and other financial institutions are more likely to offer higher credit limits to those individuals who have a proven track record of repayment of loans.
Faster approvals: Borrowers who have good score usually witness a faster approval process for their loan applications.
Approval of loans: A good CIBIL score raises the chances of loan approval. Banks prefer to give loan credit to individuals with a higher score as it reflects a lower risk of default.
ALSO READ: What is a secured credit card and how does it help build credit score? MintGenie explains
Interest rates: Usually banks offer loans at attractive rates of interest to those borrowers who boast a high CIBIL score. So, someone with a high score can easily negotiate better interest rates on loans and credit cards.
A CIBIL score is a numeric representation of creditworthiness of borrower or investor.
CIBIL stands for Credit Information Bureau India Limited, one of the credit bureaus in India, that provides credit information and maintains credit records of individuals and businesses.
The CIBIL score ranges between 300 to 900 wherein a higher score reflects better creditworthiness.
A good score means higher credit limits on credit cards, overdraft limits and other
Read more on livemint.com
