CIBIL score is a credit score that is used by lenders to evaluate the creditworthiness of a borrower. It is an important factor that determines whether or not a borrower will be approved for a loan or credit card. Here are some of the reasons why CIBIL score is important:
Loan Approval: Banks and other financial institutions use the CIBIL score to evaluate a borrower’s creditworthiness. If the score is high, it indicates that the borrower has a good credit history and is likely to repay the loan on time. This increases the chances of loan approval and getting a favorable interest rate.
Interest Rates: A high CIBIL score can help you get a lower interest rate on loans and credit cards. Lenders consider borrowers with high credit scores to be less risky and are more likely to offer them a lower interest rate.
Credit Limit: A high CIBIL score can also help you get a higher credit limit on your credit cards. Lenders are more likely to offer a higher credit limit to borrowers with a good credit history and a high CIBIL score.
Faster Loan Processing: A good CIBIL score can help speed up the loan processing time. Lenders are more likely to approve loans for borrowers with a high CIBIL score, which can reduce the time taken for loan processing.
Negotiating Power: A high CIBIL score can give you negotiating power with lenders. If you have a good credit score, you can negotiate for better interest rates and loan terms.
In summary, a good CIBIL score is important for getting loan approvals, favorable interest rates, higher credit limits, faster loan processing, and negotiating power. It is therefore important to maintain a good credit score by paying your bills and EMIs on time, keeping your credit utilization low, and maintaining a good credit mix.