Why A Good Credit Score Is Important?

A credit score is simply a number that reflects an individual's creditworthiness. The three-digit score is calculated according to the Credit Information Bureau India Limited (CIBIL). For this reason, it is also known as the CIBIL score. The credit score covers your entire history of loan repayments for a specific period of time, between the types of loans used and different financial institutions. The credit rating represents the highest recognition for financial companies when approving various types of loans, including personal loans. A good credit score reflects the essence of good credit, and therefore a better opportunity to take out a loan.

What is a good credit score?

Based on your repayment and credit behavior, your credit score can range from 350 to 900. Any score higher than 750 makes you a reliable and legitimate lender. If you have a credit score higher than 750, it means you can get better deals on your loans.

If you plan to apply for a personal loan in case of any sudden expenses or if you want to finance any large purchase of tickets, you must first check your credit score. IIFL requires a minimum credit score of 650 to be eligible for a personal loan. An IIFL personal loan of up to 25 lakh can be approved with the required credit score within 5 minutes and the loan amount repaid within 8 hours. Thanks to such small documentation and a hassle-free online application, IIFL personal loans are among the best on the market.

How to know your credit score?

You can easily find your personal CIBIL score on the IIFL website. After entering the necessary data, you can prepare your personal CIBIL Credit Information Report (CIR).

Why is a credit score important?

A credit score is most important because it reflects the following key factors in your credit history:

• 1. The credit score reflects your repayment history: Whether you have not paid your EMI or you have repaid your loan on time, all loan repayment transactions are displayed on the credit score page. You must keep in mind that the previous repayment of your loans represents 35% of your total credit score. If you plan to apply for a personal loan, you must remember to pay the existing EMI on time.


• 2. Credit score reflects your current debt: Before you can apply for a personal loan, you need to know that your existing debt represents 30% of your credit score. The credit company will use the credit score to determine the current amount of credit approved and used. This is also called credit usage.


• 3. Credit scores reflect the type of credit used: Financial companies examine credit scores to determine if an individual has used a credit balance. This factor contributes to a credit score of 10%. This means that before you apply for a personal loan, you must remember to create a credit balance or to use secured and unsecured loans. Failure to fully use your credit can affect your credit score.


• 4. Credit score reflects repayment length: Your credit score shows the duration of the loans along with your repayment history. The holder of your loan contributes to the credit score of 15%.


• 5. Credit score reveals unsuccessful credit questions: You need to realize that this is reflected in your credit score each time you enter a credit score. Along with several credit issues, a bad credit score will result in the rejection of your credit rating application.

Final line: Therefore, it is important to have a good credit score for using all types of loans, including personal loans. While a good credit score will help you secure a loan at an attractive interest rate, you can end up taking loans at a higher interest rate with a bad credit score. With attractive interest rates, you can save money and make progress in achieving your financial goals.