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Importance of CIBIL score

The CIBIL report is the history of your borrowing from all the loan providing institutions.  All the banks and some NBFCs are members of the CIBIL body.  All the members of the CIBIL are reporting about the loans application- sanctioned or denial status.  Hence, if you avail five loans from different institutions all the five loans status will be informed to CIBIL and it will reflect in your CIBIL report along with name of the financial company you applied and its status.  The report will also give details about the total amount of loans, total number of EMI, amount of EMI and overdue amount of the loan, if any.  If you stand as guarantor for a loan sanctioned to your friend/ family the same will also be displayed in your CIBIL report.  Therefore, you need to be careful when you apply loans via any agents/agency or quick loans online. We should decide any about the trusted financial institutions and apply their as per their eligibility criteria.

CIBIL score is a lifeline of almost 99 % of the people seeking opportunities for any type of loans from any formal agencies like banks and NBFC’s.  Banks are accepting loan applications from prospective clients having CIBIL score of around 750 and above.  Advantage of having high CIBIL score comes into play in case of pricing.  Pricing is nothing but the ROI charged by the banks on the loans sanctioned by them.  For example, the ROI to be charged on a loan availed by a person having 800 + CIBIL score will be less that the ROI charged on a loan availed by a person having CIBIL score of 701. Hence, everyone should be careful about their CIBIL score and apply for loans wisely. Usually banks and other loan providers in Delhi are not entertaining loan applicants having less than 700 CIBIL score.  These people face problem reference to loan amount and charge higher rate of interest.

CIBIL score also fluctuate mostly due to borrowers, who do not pay their instalments on time. CIBIL keep a count of each day delay in your EMI payment as a result your CIBIL score goes down. Due to some reason, if you do not pay back your loan, you will be declared as defaulter by the financing company and it will reflect in your CIBIL report permanently resulting drastic fall in your CIBIL score. Secondly, In case you enter into a settlement with the financing institution the loan will be closed but the settlement will be noted in your CIBIL report. We will suggest you to maintain a healthy CIBIL score for your bright future. Cause a healthy credit score is a good sign of one’s financial discipline and effective financial management.

 

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