A good credit score is one of the most important factors in determining. Whether or not an individual is eligible for borrowing. Credit score makes it easy and affordable for an individual to get any kind of small or high-value loan from a financial institution. Salaried and self-employed people frequently find that their credit score is one of the most important factors determining their ability to borrow. Whenever you decide in getting a personal loan or any high-value loan like a housing loan or car loan. You will come across the need for a good credit score.
Credit building is a process that takes time, but with the right credit activities, you will quickly get a good credit score with time. Whenever you decide to apply for a particular loan, you need to do a CIBIL score check in order to avoid any kind of loan rejection. If you are applying for a loan for the first time and come across the term “credit score”, it is important to know what a good CIBIL score is and the importance and ways to get a good credit score.
What is a good credit score?
According to financial institutions, a good credit score is anything above 750. Individuals with a credit score of 750 are always considered to be creditworthy for borrowing and exploring new credit products and lines of credit. If you try to build a good credit score, you need to have a minimum score of 750. Which is considered a good one for most banks and non-banking financial companies. A good credit score actually means that the individual has a positive credit history and financial background, which makes them eligible to get any kind of loan in the future.
What is the importance of a good credit score?
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Easy and instant approval on any kind of loan
When you decide to get any kind of loan, it is important to have a good credit score. A credit score helps in getting instant approval on any kind of loan, like a home loan, a car loan, or a personal loan that you want. Individuals with a good credit score often become good businesses or assets for the loan providers. Therefore, if you are able to build a good credit score above 750, you will get instant approval on any kind of loan without any delay. Individuals with good credit scores hardly face rejection in loan applications.
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Best rate of interest in the market
When you decide to get any kind of loan, your first priority should be to get an affordable loan first. Secondly, getting the right rate of interest in the market will always matter. When it comes to a smooth, clean track record and repayment. The rate of interest is not a fixed component and it keeps changing with the loan provider and the eligibility criteria of the individuals.
If you want the best rate of interest, you need to get into the good books of the loan provider with the help of a good credit score. Individuals with good credit scores are often trusted by loan providers and financial institutions. If you want the best rate of interest in the market. You need to start planning for your credit building process so that you get an affordable loan with the best rate of interest in the market. Learn how to get a business loan.
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Favourable terms and conditions
It is important to understand that when you choose to take any kind of loan. It comes with some terms and conditions. The terms and conditions will be favourable to the borrower only if they are able to meet the credit score requirement. It is important that you fulfil the credit score requirement and become an asset so that you are able to negotiate on better terms and conditions. Which makes your borrowing experience smooth.
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Get sanction on a high loan amount
Individuals with a high credit score often find it very easy to get a high-value loan from financial institutions. Since a good credit score speaks to their creditworthiness and responsible credit behavior, loan providers often offer them a high-value loan. Therefore, it becomes very easy for you to manage your big-ticket expenses and sudden emergencies with the help of a high loan value amount.
Must Read : What Are The Benefits of Taking a Home Loan From ICICI Bank?
How to improve your credit score?
- Pay your bills on time.
- Keep no pending or outstanding balances on credit card bills or loan repayment amounts.
- Do not keep applying for multiple loans within a short span of time.
- Always maintain a balanced credit mix with secured and unsecured loans in your credit profile.
- Keep your debt to income ratio low by finishing off all your existing loans before taking a new loan.
- Keep your credit utilisation ratio below 30%.
- Even if you don’t use them, keep credit accounts with a long credit and financial history open.
Wrapping up
Check your CIBIL score to ensure that you are eligible for easy and affordable approval on any type of loan that you desire. Check CIBIL score instantly and get accurate results with Clix Capital.
