A successful application for a lending product requires you to have a good credit score. Doesn’t matter whether you apply for credit cards or loans, the importance of credit score can’t be undermined. It’s because the score gives lenders an idea of your repayment capabilities. So, before you apply, be aware of the score you have. There are several credit bureaus, such as CIBIL, that provide credit scores to individuals. You can thus read this post to know the minimum CIBIL score for credit card, personal loan, home loan, etc.
What is the Minimum CIBIL Score Required for a Credit Card?
Credit cards are plastic instruments that can buy you a variety of items at both online and offline stores. The best part about shopping with a credit card is the rewards and cashback you earn on your spends. These benefits reduce your shopping cost and make it an enjoyable affair. As credit cards are unsecured and given without any collateral, lenders would want you to have a credit score above 700.
How Much Do You Need to Score to Enjoy a Hassle-free Approval to Personal Loans?
Personal loans are given to fulfill all your personal needs and aspirations, such as marriage, emergency cash, education, etc. As these loans come without any collateral, you would need a high credit score to get the approval. Like in the case of credit cards, here also you will need a score of more than 700 to get the nod.
Importance of CIBIL Score in the Case of Home Loans
Now come to the point of home loans that you take to buy, construct, renovate or extend a housing unit. Since the loan is backed by an equitable mortgage of the home you buy, the otherwise stringent credit norms can soften a bit. So, in the case of home loans, even a credit score of around 650 can be deemed good for approval.
How Does the CIBIL Assign You a Credit Score?
CIBIL assigns credit scores to individuals having a repayment history of at least 6 months to a year. It provides a score in the range of 300 to 900 in India. A score of more than 750 is considered very good and one must aim for that. A lot of things go into building a credit score for you, such as how many credit accounts you have, how much credit limit you have utilized, your payment schedule, etc. More credit accounts can translate into a good credit score provided you repay debts on time. It also shows your ability to manage different debts and instills confidence among lenders about your repayment capabilities.
How Can You Improve Your Credit Score?
If your credit score is bad, you first need to know the reasons that have lowered your credit score. Is it the payment default or frequent credit enquiry? You can know all that in your CIBIL report that you can request on the official website of the credit bureau. Take note of the report and work accordingly. If the payment delay or default comes as the reason, ensure you avoid the same by prioritizing your spends and leaving enough to pay on time. If you do it consistently, the score will start to go up.