Credit point: How does it affect the loan you can increase and the interest rate?

At the time of increasing personal loan, it is essential that lender has a good creditworthiness. This is one of the most important criteria that lenders examine to determine the creditworthiness of a borrower. The creditworthiness, also known as Cibil score, is a three-digit number between 300 to 900, indicating a customer of the loan capacity of a customer. There are four RBI licensed credit information companies in India. This is Crif High Mark, Cibil, Equifax and Experian. A score above 700 is supposed to be a good creditworthiness and the score is considered poor less than 600. You can check your credit rating here. A good creditworthiness means that the person’s credit behavior is impressive in the past and a low creditworthiness implies that there were some delays or defaults in loans and the payment of credit card account. Having a good credit rating helps to loan applicants in the following ways. Credit point helps in these ways: I. Loan approval: Lenders tend to check your creditworthiness. A higher score implies that the applicant is a low-risk lender, increasing the chance of approval. A low score (ie below 650) can lead to rejection. Ii. Interest rate benefits: Those who have a good credit rating manage to attract lower interest rates. This is because the lender gets confidence that will repay you on time. A poor score means that banks will charge a higher rate to cover the risk. Iii. Suitability: Lenders can provide you with a higher loan amount to high -score applicants. With a poor score, the approved amount is typically reduced. Iv. Quick Processing: Those with high credit rating receive immediate loan approval or pre -approved personal loan offers. One can also negotiate for better conditions, including tenure, EMI options and waiver of the processing fee. V. Trust factor for future credit: A good score helps with personal loan and also builds credibility for future loans, such as car loans and credit cards. Disclaimer: Mint has a fusion with fintechs to provide credit, you must share your information if you apply. These bonds do not affect our editorial content. This article only intends to educate and distribute awareness about credit needs such as loans, credit cards and creditworthiness. Mint does not promote or encourage credit as it has a set of risks such as high interest rates, hidden costs, etc. Visit here for all updates for personal finance