CIBIL SCORE : The Higher The Better
Apr 21, 2016 Legal Guidance
Lending money to someone else is always a job of serious and critical thinking for the lending institutions or individuals. Plethora of questions pops in their head while proceeding in this decision.
Should I or should I not lend him? If I do, then how much to give for a loan? How insure security of their money? Is the person they lending to credit-worthy or not?
Well here is an answer to encounter all these questions. The CIBIL score!
Now the question popping would be what exactly is CIBIL score?
The term CIBIL stands for Credit Information Bureau India Ltd. It is the first Credit Information organization in India which is also known as Credit Bureau. They accumulate and maintain records of individual’s and commercial organization’s payment concerning to loans and credit cards. Banks and other individual lenders submit these records to the CIBIL on a monthly basis and using this information a Credit Information Report (CIR) is created and then a credit is molded, enabling and empowering lenders to evaluate and approve loans of concerned applicants.
Hence CIBIL basically calculates and estimates the potential risk in money lending. The score ranges from 300-900 and the score is derived using various information regarding the loan applicant’s previous loans or debts.
CIBIL is licensed by the Reserve Bank of India and is administered by the Credit Information Company Regulation Act 2005.
The CIBIL score plays a vital part in loan application procedure. Low credit score leads to the cancelation of the application of the lender , on the contrary a high CIBIL score makes the lender go through the application and then will lend the required loan to the applicant thus confirming as credit- worthy.
This score is in a way the first impression of the applicant to the lender. The lender takes the decision of giving the loan on the basis of this score as it helps them take better decision and thus have sense of security for their money. Well, a score of say 800 is considered as a good score. Most scored those are above the range of 750 gets 90% of the time sanctioned from the banks.
The higher is the score, the better are the chances of getting the loan.
There are other benefits as well of having a high CIBIL score-
~ a high score helps you negotiate for a low rate of interest
~ it helps you easily get house loans
~ its increases the speed as well as your chances of getting credit card.
~ a good score always gives you the bargaining benefit, a good CIBIL score holder can negotiate with the bank for waiving off the processing fee.
Therefore, it is always advised to maintain a healthy cibil score to avail easy loans and other benefits.
Should I or should I not lend him? If I do, then how much to give for a loan? How insure security of their money? Is the person they lending to credit-worthy or not?
Well here is an answer to encounter all these questions. The CIBIL score!
Now the question popping would be what exactly is CIBIL score?
The term CIBIL stands for Credit Information Bureau India Ltd. It is the first Credit Information organization in India which is also known as Credit Bureau. They accumulate and maintain records of individual’s and commercial organization’s payment concerning to loans and credit cards. Banks and other individual lenders submit these records to the CIBIL on a monthly basis and using this information a Credit Information Report (CIR) is created and then a credit is molded, enabling and empowering lenders to evaluate and approve loans of concerned applicants.
Hence CIBIL basically calculates and estimates the potential risk in money lending. The score ranges from 300-900 and the score is derived using various information regarding the loan applicant’s previous loans or debts.
CIBIL is licensed by the Reserve Bank of India and is administered by the Credit Information Company Regulation Act 2005.
The CIBIL score plays a vital part in loan application procedure. Low credit score leads to the cancelation of the application of the lender , on the contrary a high CIBIL score makes the lender go through the application and then will lend the required loan to the applicant thus confirming as credit- worthy.
This score is in a way the first impression of the applicant to the lender. The lender takes the decision of giving the loan on the basis of this score as it helps them take better decision and thus have sense of security for their money. Well, a score of say 800 is considered as a good score. Most scored those are above the range of 750 gets 90% of the time sanctioned from the banks.
The higher is the score, the better are the chances of getting the loan.
There are other benefits as well of having a high CIBIL score-
~ a high score helps you negotiate for a low rate of interest
~ it helps you easily get house loans
~ its increases the speed as well as your chances of getting credit card.
~ a good score always gives you the bargaining benefit, a good CIBIL score holder can negotiate with the bank for waiving off the processing fee.
Therefore, it is always advised to maintain a healthy cibil score to avail easy loans and other benefits.
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