The credit score is basically a score which is set by the CIBIL Bureau and is of huge significance in terms of maintaining financial records of an individual. The Credit score also known as CIBIL score plays a key role when a person is likely to apply for availing any kind of financial help from the banks of any other NBFCs that are being run throughout the country. There can be times when you actually feel that your finances are draining out and you are in an urgent need of availing finances as soon as possible. Here the role of credit score comes into play.
A Credit Score is a must requirement for availing any kind of financial goods from the banks or any other financial firms. The lender who’s tending to lend you the loan amount checking your credit report and hence according to your CIBIL approves the loan amount that you are looking for.Your credit report is a mandatory document when it comes to availing any of the financial services It consists of all your credentials and details about your credit-related activities. The entire track record of such things is maintained in the credit report by the CIBIL bureau.
Know more about the Credit Score:
A credit score is a score that ranges from 300-850. A credit score that is usually above 700 is considered to be a good one. Every time you apply for a loan the lender demands for your credit score and accordingly sanctions your loan amount. If you have a low credit score, then chances of your loan rejection are more prevalent as the lender might doubt your intentions and capabilities of repaying the loan amount within the given tenure.
How is the Credit Score Set?
The credit score is set according to your banking activities and credit histories. It varies according to your payment patterns, your credit card bills, etc. The score is to be duly maintained by keeping track of all your credit bills, lately payments EMI’s, etc.
The report of all these activities is presented by the banks and compiled by the Bureau accordingly.
Report on Various Credit Ranges
Percentage of People
300 to 579
580 to 669
670 to 739
740 to 799
800 to 850
The above report gives us an idea about the importance of the score range and the clarity that one should have about his or her credit score.
Review of the impact of different credit ranges in brief:
1. Applicant whose score lies between the range 300-579, are considered subprime borrowers.Applicants whose CIBIl comes under this category may be required to pay a fee or depost, and may not get their loan or other credit applications approved.
2. Only 8 percent of the applicants falling under the range of 580-669 are likely to become seriously negligent in future.
3. Applicants falling under the range of 670-799 receive better than average rates from lenders , thus giving them due credit benefits.
4. Applicants whose score fall under the range varying from 800-850 are the top listers and prioritized with best of the interest rates from the bankers and the lenders.