520 CIBIL Score - Is it good or bad?
A 520 CIBIL Score is classified as poor and falls below the ideal threshold for good creditworthiness. With CIBIL scores ranging from 300 to 900, scores below 600 indicate high financial risk. A 520 score suggests delayed payments, defaults, or excessive credit utilisation. Borrowers with this score may struggle to obtain loans or credit cards, as lenders view them as unreliable. Securing financial products with favourable terms is extremely challenging. Improving your financial habits, such as timely repayments and monitoring credit reports, is crucial to rebuilding trust with financial institutions.
How to improve your 520 CIBIL Score?
To improve a 520 CIBIL Score, start by ensuring timely payments of existing loans and credit card dues, as this demonstrates financial responsibility. Keep your credit utilisation ratio low, ideally under 30% of your available credit limit. Avoid applying for multiple loans or credit cards simultaneously, as it can signal credit hunger. Regularly check your CIBIL report for errors or inaccuracies and get them corrected promptly. Maintain a healthy mix of secured and unsecured credit to strengthen your profile. Consistency in financial discipline and patience is key to gradually improving your creditworthiness over time.
How does a 520 CIBIL Score impact interest rates?
A 520 CIBIL Score has a significant negative impact on interest rates. Borrowers with such scores are deemed high-risk by lenders, resulting in loan rejections or approvals with higher interest rates. For instance, loans offered to those with good credit may come with interest rates around 10%, whereas individuals with a 520 score could face rates exceeding 15%. High-risk borrowers are often subject to unfavourable loan terms. Improving your credit score is crucial to securing competitive interest rates and better repayment conditions.
