CIBIL score decides your credit limit and gives an insight about your financial fitness, payment patterns and no liability status. Maintaining a high CIBIL score or a decent score becomes crucial when you want to apply for a credit card or look for loan advances often. CIBIL score helps the lending institution decide as to give loan advances or not. It tells about the individual’s approach towards repayment.
Usually, every bank or lender has its own terms and conditions of offering credit. Some might not consider a low CIBIL as the deciding factor for offering credit however some might be rigid at the same time. With the variation of CIBIL score, the terms and conditions also vary. With a low CIBIL score you might not be able to avail all the benefits and facilities as offered to an individual with high CIBIL. In case of rejection over credit adds on to your credit history with the score dropping, so it is advisable to maintain a decent credit score.
How are CIBIL scores looked at?
How your score is observed is important for you to know to maintain better records. A credit score above 750 is considered as excellent, above 700 is good, above 600 is average or fair and below 600 is poor. To get a credit card approval and a higher credit limit with other benefits, your score has to be good. The credit cards have been categorized based on the CIBIL scores and are offered services and offers accordingly.
What are the factors that affect your CIBIL score?
- Closing credit accounts often affect the credit score. If you are using different credit cards don’t close them too early.
- Higher number of inquiry calls over the loan advance request impacts the credit score.
- Making delayed payments or missing on your EMIs affect your credit score.
- Debts in your name create a negative impact so be clear all your dues.
- Keep all your accounts updated on payments.
What are the gains of credit cards on high CIBIL?
Some of the advantages of having a good CIBIL to avail credit card is:
- You have the eligibility to avail the top most credit card.
- You become suitable for a higher credit limit.
- You are liable to pay low interests on your card.
- You get easy approvals.
These are some of the obvious benefits you can avail on your cards, however, they are a lot more you can avail.
How can you build a good credit score?
- Pay your bills and EMIs on time.
- Do not use the entire credit limit on your credit cards.
- Check your credit reports regularly and do not ignore the shortfalls.
- Clear your debts at the earliest.
Credit card utility differs for every individual and there are different cards offered on different credit scores, however, the lender’s terms and condition might change for every application they receive and approvals they offer. Keep your approach right as per your requirement and you can avail the best offers.
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