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What makes your credit score an important piece of your loan process

  • Highlights

  • A good credit score gets your loan approved easily

  • It can be the ticket to a higher loan amount

  • It can also get you financing at nominal interest rates

  • Check your credit score to keep a track of your finances

Your credit score is an important factor when it comes to any and all applications you make for credit, be it a loan or a credit card. Whether you’re taking a loan now or planning to borrow one in the future, maintain a good credit score.

Check your cibil score for free
Though you may have heard lenders and financial experts stressing on having a good credit score of 700 or more, it’s time you also knew why your credit score is so essential.

A good credit score gets you quick approval on your loan application

Though most lenders may not mention credit scores in their eligibility criteria, having a good credit score is a necessity. This is because your credibility contributes to your eligibility for the loan.. Even if you don’t want to take a loan any time soon, a sudden emergency like medical bills or urgent home repairs, may require you to find a fast source of cash.

It is essential you have a good credit score since it speeds up your loan processing. A high CIBIL score for personal loans is especially necessary since these are unsecured loans and are disbursed very quickly. The minimum CIBIL score for personal loans is often considered to be between 700 and above. To perform a free CIBIL check. Simply visit the Bajaj Finserv website and enter your basic details to check CIBIL score for free.

Additional Read: How To Improve Personal Credit Score

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A good credit score gets you a sanction of a higher loan amount

The better your credit score is, the more reliable you seem to a potential lender since it represents your credit history. It also proves that you can be trusted in terms of repayment. So, a lender is more inclined to give you a sanction for a higher loan amount.

In case your credit score is low, even if your loan application is approved, the lender might offer you only 50% to 60% of the total loan amount you wish to borrow.

A good credit score gives you the power to negotiate a lower interest rate

Whether you have applied for a collateral-free loan (like a personal loan or business loan) or a secured loan (such as a home loan or a loan against property), a lender viewing your application will judge your credibility based on your credit score. A good credit score proves that you are not a risk, making you seem reliable to the lender. This, in turn, helps you establish trust with the lender in order to negotiate for lower interest rates.

Additional Read: Check CIBIL Credit Score Offline and Online

How does a good credit score make you a potentially credible borrower

A good credit score often presents the lenders with a positive review of your repayment history. It proves that you have been capable of borrowing and repaying a loan in the past and that you are not a novice. It also measures your credit utilisation ratio and concludes that you are not credit-hungry.

Types of credit you can avail on a good credit score:

- A credit card to pay for regular or irregular expenses
- A home renovation loan to renovate your house.
- A loan against property to consolidate debt, pay for overseas education or expand your business.
- A business loan if taken on your own name to grow your firm.
- A personal loan to finance a wedding or emergency medical bills.
- A 2 or 3-wheeler loan to purchase your vehicle.

So, work towards maintaining and increasing your credit score and prepare for the future by being financially prepared.

Bajaj Finserv, one of the most diversified non-banks in the country, presents pre-approved offers on all kinds of loans and financial products. Simply share your basic details and see your pre-approved offer to avail financing.

DISCLAIMER:
The content of this document is meant merely for information purposes. The personal loan features mentioned in this article are subject to updation, completion, revision, verification and the same may change materially based on policy revisions. For more details, please visit our Personal Loan terms and conditions page here.

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