Namaskar, my name is Rupesh Jadhav, and you are welcome to the Rupeshfinancialexpert.in, Where I unlock the knowledge of finance, I have made a whole series blog on CIBIL score previously, where we understood the basics of CIBIL score. What is the CIBIL score? How is its calculation done? How can you check the CIBIL score online? I made a blog on this too. If your CIBIL score is less then, how can you improve it? Or how can you take a loan on it? If you haven’t read these blogs, then do read them. They are quite important blogs. I will tell what CIBIL score is considered as good? On what score, will you get a loan easily? Or the interest rates are low. Some people say that what is the need for maintaining CIBIL score, if we never take a loan, I’ll answer some of these questions in this Blog. So read the blog.
So, you can get your CIBIL score in this way. You can get it for free on the CIBIL website. I have already made a blog on how to check CIBIL scores for free. If you haven’t read that blog, then please check it. So, if we talk about good or bad CIBIL scores, how much score is good and how much is bad? For example, if my score is 836, I have taken a snapshot of my score. Is it a good score or a bad score? will try to understand that. The first thing to know is that the CIBIL doesn’t decide what score is good or what is bad, it is just a credit rating agency. It doesn’t disperse loans. The banks decide what score is good for them, and what is bad.
For some banks, a score above 700 can be good. Some banks say that they will provide loans on the shore of above 800, Some banks may say that they can give loans on 700. It depends on banks and NBFC, so if we generalize, then A score of 750 is considered a good score. Now why am I saying this? 80% of loans of the banks and NBFC in total, then it is dispersed to the people having a score above 750. So, if the 80% of loans are above 750 then, we can assume that a score above 750 is a good score. and if you can maintain the score above 800, Then it is a very good thing. The chances of the rejection of your loan become negligible, but if you are not eligible for some other reason, then it is a different thing, but your loan will not be rejected based on your CIBIL score. If your score is between 650 and 750, Then it’s not like you’ll not get a loan, there are many banks, especially the small banks or NBFC (Non-Banking Financial Companies), They can definitely provide you with a loan. But the interest rates may be high. But if your score is below 650, Then we can call it a bad score, it is a quite low score. And you may face many problems. The chances of rejection of your loans are high.
So, if your score is below 650, Then you should try to improve your score as soon as possible, Whatever your outstanding loans are, or if your credit card payment is a default Clear that. If there is any loan or credit card, settle it or close it. I’ve already made a quite detailed blog on how to improve a CIBIL score. so, you can read that blog. In fact, if your score is in the range of 650 to 750, Then you should try to improve the score., Why am I saying this? Why is a good CIBIL score important? The first thing is that you’ll get a loan very easily. It does not cause much delay. Maybe you have an immediate requirement Maybe you need money within a week or 10 days. If your CIBIL score is good then you’ll get the money very easily, first thing is that. Second, you are charged with the lowest interest rates. suppose your score is 850 plus, and if you go to take any loan, then you will get the interest rates in the market.
So, if I take an example, suppose your score is 850 plus, the lowest interest rate of personal loan is charged 15% on today’s date, then you will get 15% easily. We are talking only about personal loans. Maybe in the range of 750 to 800, You’ll be charged with an interest rate of 16 to 17%, and in the range of 700 to 750, you may be charged with an interest rate of 18 %., If we take the range of 650 to 700 then you may get charged 19 to 20%. See, if there is some difference in your CIBIL score. It is 650 from 800, Then the difference of interest rate is straight 5%, Why would you pay more interest rates? If you can maintain a good CIBIL score, then you should definitely do that. The second thing, it is a huge deciding factor in an unsecured loan. For example, there are secured loans. A home loan is a secured loan. A car loan is a secured loan. By any chance, if you do a default, then the bank can do its recovery by selling the house, it can do its recovery by selling the car. Or if there is a gold loan then it’s also a secured loan, Recovery can also be done by selling the gold.
But, if there is a personal loan or a credit card debt, it is an unsecured loan. The bank doesn’t have any type of security. So, that’s why the CIBIL score is the most important deciding factor. Then the fourth thing is that sometimes people say, we don’t have the requirement of loan, we don’t spend much. We only spend what we earn. This is okay. There’s nothing wrong with it. But we don’t know if we will have the requirement in the future or not. For example, if you want to provide education to your child, then you may require an education loan. Or if you are doing someone’s wedding, then you may require a personal loan for the wedding. If you want to renovate your house, you may require a loan for that also. I’m telling you this with my experiences. If you don’t have a credit history, then you may not get the loan easily. And it isn’t a very big thing to create a credit history on today’s date. You can issue a credit card and use it to do your payments. And do your credit card payments timely. And as a result, a good CIBIL score will be maintained. And when you will require a loan, then it will not show you no credit history. or no credit history in CIBIL score. And you may get a loan easily. So, we should try to do our payments time to time. If we do our credit card or loan payments timely, then a CIBIL score of 850 plus is maintained very easily. And the interest rates that are charged are also quite less. whenever we have the requirement of a loan.
If you liked this blog, then comment it. and share it with your friends and family members, so that they will also get the benefit of this blog, If you have any suggestions or you want to give any feedback regarding the blog or the channel or if you want to suggest any topic for future blog, Then you can comment below. I keep coming up with the interesting and informative finance blog, Let’s meet in the next blog.
Till then keep learning, keep earning, and be happy.
