Credit Score is basically a three-digit numeric value provided by Credit Information Bureau India Limited (CIBIL). The credit score, also known as CIBIL score, ranges between 300-900, and it plays a crucial role in defining your reliability as a borrower. It is measured by evaluating your debts and repayment history collected from various banks and financial institutions.
Importance of CIBIL score
Lenders usually check your credit score while reviewing your loan application. Thus, if you have a high credit score, you would be eligible for a higher loan amount at a reasonable interest rate. On the other hand, if you have a poor credit score, it may affect your loan eligibility significantly. In case, the lender grants you the loan amount despite your poor credit score, the interest rate charged on your loan will be considerably higher. Keeping all these factors in mind, it becomes essential that you improve your credit score before applying for a loan. At the same time, it is also equally important that you check your credit score regularly. The reasons for the same are mentioned below:
Reasons To Check Your Credit Score Regularly
1. It will help you know your financial health
Checking your credit score on a regular basis will give you a better understanding of your financial health and where you stand. If you come to know that you have a bad credit score, you can work towards improving it by clearing outstanding dues, making timely repayment of existing loans, and by minimizing your credit utilization ratio. On the other hand, if you happen to have a good credit score, your primary objective should be to maintain it and keep your high credit score intact. Keeping track of your credit score will help you be more financially disciplined.
2. You will come to know whether your credit information is accurate
Your credit score is basically a reflection of the details in your credit report. Therefore, if you manage your finances wisely, and yet your credit score is lower than what you expect, there may be chances that your credit report contains some errors. In case of any errors, you should dispute them with the credit bureaus and get it resolved at the earliest.
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3. You can predict the outcome of your loan application
If you don’t check your credit score before applying for a loan, there may be chances of your loan application getting rejected due to your poor credit score. This can further hamper your credit score. Thus, checking your credit score will give you a fair idea regarding whether to apply for a loan or not. A CIBIL score of 750 or above is considered to be an ideal score, and your loan application will be approved quickly, provided you satisfy the remaining eligibility criteria. Whereas, if your CIBIL score is below 700, you may consider improving it to get better loan offers.
4. You will know whether you qualify for better credit offers
If you have a good credit score, you will have a better chance of being approved for credit cards with competitive interest rates, rewards, or other lucrative offers. Therefore, keep track of your credit score and make the most of it to enjoy better credit offers.
Now that you are aware of the importance of CIBIL score ensure that you keep yourself updated with your CIBIL score. To ensure that you have a good credit score, you must avoid making multiple loan applications. This is because every time you apply for a loan, the lender may conduct a hard enquiry to fetch your CIBIL report. This may affect your credit score. Therefore, it is advisable to compare various loan offers provided by different lenders before making the final decision.
You can check CIBIL score by visiting the official CIBIL website and filling an online application form. You will be required to pay a nominal fee to fetch your credit report from CIBIL’s official website. However, you can check your credit score for free at Finserv MARKETS. All you would have to do is fill an online form by providing your personal and employment details. Apart from fetching your credit report, you also get to know about the factors that impact your credit score. This can help you boost your credit score gradually.
Once you conduct your CIBIL score check online, you can also avail a wide range of financial services at Finserv MARKETS. Right from availing loans, purchasing insurance to making smart investments, Finserv MARKETS can prove to be a one-stop destination for all your financial needs.
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