Understanding the CIBIL Score Range: Importance and Meaning

Jul 4, 2024

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Every Indian aspiring for good financial standing, especially those eyeing loans or credit cards, have at least one time or the other encountered the term 'CIBIL score'. Maintaining a healthy score is crucial; however, understanding what constitutes the CIBIL score range is just as important.

CIBIL or the Credit Information Bureau (India) Limited is the leading credit information company which accumulates and maintains records of an individual’s payments related to loans and credit cards. This record is provided to the CIBIL by banks and lending institutions, on a monthly basis. Accumulating this data, CIBIL then rates these individuals between 300-900; this is referred to as the CIBIL score range.

The Credit score range plays a pivotal role in the loan granting process. A score closer to 900 is indicative of robust financial health, which potentially makes you a worthy candidate for acquiring loans or credit cards. Conversely, a score closer to 300 highlights issues related to payment default or debt and could detract potential lenders.

Most lending institutions prefer individuals with a CIBIL score closer to 750 as this shows the person’s past good credit behavior and responsible repayment habit. They believe such individuals are less likely to default in the future, hence are considered creditworthy. Meanwhile, those below this score might face challenges in securing loans or may be subjected to higher interest rates or shorter tenure.

A common query is how to know the CIBIL score? The CIBIL score can be checked online via the CIBIL score customer care number, or by logging onto their website. Regular checks on this score can help in maintaining or bettering one's financial standing.

In case of a low score, vehicles for improvement are also accessible. These may include ensuring timely repayment of EMIs and credit card bills, keeping credit utilization ratio under 30%, refraining from applying for multiple credit channels simultaneously and maintaining a healthy balance of secured and unsecured loans.

Should one find discrepancies in their score, the issue can be addressed via the CIBIL score customer care number. Accurate documentation and account information is essential, and rectification may take up to a month.

In summary, understanding the crucial role of the CIBIL score range is necessary for financial planning. Regular checks, improvements and corrections when required contribute to a robust financial future.

As the preferred choice of several lending institutions, a good CIBIL score not only facilitates loans and credit cards approval but also gives a negotiating leverage for lower interest rates. After all, a healthy financial standing is a testament to one's money management skills, making one a promising candidate in the eyes of potential lenders.

For a seamless experience, download the Bajaj Finserv App to check your CIBIL score, access personalized offers, and manage your credit health on the go.