We always hear that the bank or any financial company does not give loan if the credit score gets bad. A credit card is also not made due to poor credit score. The loan is available on the basis of credit ability of a person. Credit Information Bureau India Limited (CIBIL) offers you a score between 300 and 900 marks. It is decided based on how much your previous credit card usage is, how do you keep your bank account, no check has bounced, existing loan, existing loan without insurance, repayment of loan and how many times you have loaned Or have applied for a credit card.
The better your credit score, the cheaper the loan. At the same time, if the credit score is bad, then you will have to pay the price by paying more interest.
What is a credit score?
Credit score is also known as the CIBIL score in a colloquial language. In India, it was first started by the Credit Information Bureau of India (CIBIL). In the beginning, money had to be spent to get it. But now you get it free every month. There are now four companies in the country that provide credit scores. These companies are Kriff High Mark Credit Service, Equifax Credit Service, Experian Credit Service and Trans Union Cibil Limited. You can get these four companies every month for free.
Next, know how the interest rate is determined according to the score?
According to this, the interest rate
will be determined according to the score, the EMI of the loan will be determined according to the score given by the Credit Information Bureau of India (CIBIL). Suppose you have applied for a home loan in a bank and the interest rate of the bank is 8.35 per cent. If your score is above 760 points then you will get a home loan at an interest rate of 8.35 per cent.
For 725 to 759 points, 8.85 per cent and below 724 points will have to be loaned at 9.35 per cent interest rate. If you are applying for a loan for the first time or there is no credit score of any kind, then the bank will charge interest at the rate of 8.85%.
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impact of your credit rating on home loan
| Bank | Interest rate on loan | EMI (per million) | Difference in total amount (in rupees) |
| SB I | 7 – 7.10 percent | 775 – 781 | 1,443 |
| Bank of baroda | 6.85 – 7.85 Percent | 766 – 827 | 14,594 |
| PNB | 7 – 7.25 percent | 775 – 790 | 3,618 |
| ICICI | 7.45 – 8.10 Percent | 803 – 843 | 9,633 |
Loan amount – 30 lakhs, duration – 20 years
ahead, know how you can know your credit score.
This is how you can know
your credit score easily you can know your credit score . On the CIBIL website you can easily find out the credit score. For this one has to go to www.cibil.com and fill the online form. Also you will have to pay 550 rupees. Once the authentication process is done, you can download the CIBIL score and report.
- The 30% CIBIL score depends on whether you are repaying the loan on time or not.
- 25% depends on secured or unsecured loans.
- 25 per cent depends on credit exposure.
- 20 per cent depends on the use of debt.
- Pay your bills on time to improve the CIBIL report.
- If you pay the loan on time for 6 consecutive months, then the CIBIL report may see improvement.
- The credit limit and outstanding balance of the credit card should be kept low and do not take much loan.
- Give more importance to secured loans like home loans, auto loans and avoid taking unsecured loans.
- Regularly review your joint bank accounts, CIBIL score.
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