Four benefits of a high credit score

Individuals are assigned credit score by credit rating agencies such as Credit Information Bureau of India Ltd (CIBIL) to indicate their history of previous loan repayments and thereby signify their creditworthiness for the lending institutions. The CIBIL credit score is indicated by three digit numbers ranging from 300 to 900. If the score is between 300-500, it is considered as a ‘Poor’ score, between 500-700 the score is considered as ‘Fair’, and a score in the range of 700-800 is considered as ‘Good’, while a score in the range of 800-900 is considered as ‘Excellent’. So, If you have a high credit score, you can enjoy the many benefits that come with it. Some of the benefits of high credit score are as follows:

Low rate of interest: A person with a high credit score gets loans at lower rate of interest as compared to a person with an average or low credit score. This is because banks and financial institutions encourage people with good credit history to borrow from them by offering them loans at lower rate of interest.

Higher loan amount: The lending institutions will offer higher loan amount if you have a high credit score as your track record of past borrowings and repayments gives them the confidence to lend you a higher loan amount.

Higher repayment period: The lenders may also give you the facility of a higher repayment period so that your EMIs will be lower and your loan repayment does not impact your lifestyle.

Quicker processing and approval: Your loan would be processed and approved quickly so you don’t have to wait to get the loan amount in your hands.