Cibil Score is an important factor to take a loan from any bank. It is generally believed that the loan is easily found when a good CIBIL score, but the question is whether people who have a CIBIL score bad or zero (zero), will they get a loan? Let’s understand in detail.
What is the range of CIBIL score?
The CIBIL score is between 300 to 900.
- 300 score: It is considered extremely bad, often called ‘Zero CIBIL score’.
- 900 score: The best score is considered, which easily gets a loan at a low interest rate.
Bank’s concern for customers with poor CIBIL score
Banks evaluate the customer’s ability to repay the loan before giving a loan. While giving loans to customers with poor CIBIL score, the bank is worried that the customer may not be unable to pay loan. That is why customers with poor CIBIL score are difficult to get loans, and even if they get, interest rates are very high.
Impact of poor CIBIL score
Not only does the loan get a problem in getting a loan, but it also affects other financial services.
- Effect on insurance: Insurance companies may charge more premiums or refuse to pay insurance when they are poor CIBIL scores, as they consider it a more risk case.
- Problem in issuing credit cards: It can also be difficult to get a credit card in case of poor score.
What may have to mortgage those with bad scores?
If your CIBIL score is close to 300, banks or financial institutions can bet some mortgage before giving loan, such as property or jewelry. In such a situation, banks will conduct a thorough investigation into your entire financial situation, which may take a long time.
CIBIL score improving tips
- Submit the loan and credit card installments on time.
- Do not use the credit limit more than 30%.
- Pay the old loan liabilities soon.
- Avoid applying for loans in many consecutive places.
Maintaining a better CIBIL score will benefit you financially and the loan process will be easier.
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