620 CIBIL Score - Is it good or bad?
A 620 CIBIL Score is considered fair but below the ideal range for good creditworthiness. While it is an improvement over poor scores, it still signals some financial instability, such as delayed payments or high credit utilisation. Borrowers with this score may face difficulty in securing loans or credit cards with favourable terms. Lenders might perceive you as a moderate-risk borrower and offer credit at higher interest rates or impose stricter conditions. Improving your score through disciplined financial habits is essential to qualify for better financial opportunities and access loans or credit cards with competitive interest rates.
How to improve your 620 CIBIL Score?
Improving a 620 CIBIL Score requires consistent financial discipline. Start by ensuring timely payments of all loan EMIs and credit card bills. Reduce your credit utilisation ratio to less than 30% of your total credit limit. Avoid applying for multiple loans or credit cards in a short time, as frequent inquiries can lower your score. Regularly monitor your CIBIL report for inaccuracies and resolve any errors immediately. Maintain a balanced mix of secured and unsecured loans, demonstrating responsible credit usage. With patience and consistent efforts, you can improve your score and qualify for better financial products over time.
How does a 620 CIBIL Score impact interest rates?
A 620 CIBIL Score can result in higher interest rates for loans or credit products. Borrowers with this score are viewed as moderate-risk by lenders, who may approve loans but at less favourable terms. For instance, interest rates might be higher compared to those offered to borrowers with excellent scores (750 or above). This increases the overall cost of borrowing. To access loans with competitive interest rates and better repayment terms, improving your score through timely payments and reduced credit usage is crucial. A higher credit score can open doors to more affordable financial options.
