Your CIBIL score affects the interest rate you pay to your lender and also plays a pivotal role in deciding whether your loan application will be approved or not. Read on to learn a few CIBIL score basics, and what scores within a variety of ranges may mean for your borrowing future.
A CIBIL score in the range of 781-850 implies that you have been responsible when it comes to paying credit card bills on time and in full each month. A score in the range of 661-780 suggests that you are generally financially responsible when it comes to money management. If you have a score in the range of 601-660, it means you may be going through some tough credit times, or at least recovering from recent setbacks. An individual with a score between 300-600 has a significantly damaged credit history. This may be due to the default on payment of loans or credit card bills. A poor CIBIL score may also be the result of a bankruptcy. In such situations, you can apply for a secured credit card. Use it wisely and your credit score could improve sooner than later. If you have a credit score below 300, there are chances that you haven’t yet established a credit score or have a credit history. So, if you apply for your first loan, ensure that you pay your dues on time. Hence, your CIBIL score plays a major role in determining whether you will qualify for credit as well as the terms (including interest rate) of the loan.
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