Most people are very laxed when it comes to their credit rating. In this article we talk about the importance of a Good Credit Rating Score.
They feel that a couple of credit card defaults will not harm them. If you are seriously considering buying a home by taking a loan then it’s high time to get serious about checking your credit worthiness. Credit scores have come a long way in establishing the credit worthiness of clients.Remember every bank will check your credit rating before granting you a loan.
Credit Information Bureau India Ltd (CIBIL) plays an important role in helping loan providers(Banks) and also helping consumers get faster credit on better terms. It is responsible for collecting and maintaining payments pertaining to loans and credit cards. These records are submitted by banks and other lenders to CIBIL on a monthly basis. The information collected is then used to calculate credit scores which are then provided to the lenders (banks) to evaluate and approve loans.
Credit worthiness is defined as the individual’s credit score, which is based on the credit history of the person. The credit history will encompass things like how much debt does the individual have, the regularity of the payment schedule,how often does the individual borrow etc. Credit worthiness will also indicate the borrower’s repayment capability.
As the transaction value while purchasing a house is very high, both the developer and the banks take utmost care to check the credit worthiness of the individual.
Good Credit Rating Score
1) Home loans are offered on the basis of certain factors
The interest rate will depend upon the specifications and requirements provided by the customer.
The credit score is broadly defined below:
a) An Excellent credit score (760-850) will help in getting you the lowest interest rate available.
b) A very Good Score (700-760) will help in getting you an interest rate 0.25 percent higher than the lowest available rate.
c) A Good Credit score (660-699) Will help in getting you an interest rate at 0.5 percent higher than the lowest rate available.
d) A Moderate Credit Score (620-660) is the beginning of suspicion and so the interest rate will be approximately 1.5% higher than the lowest rate available.
e) Poor Credit Score (580-620). In this case very few banks will offer you loans. And if they do, then the rate of interest will be much higher than the lowest rate available.
2. The higher the credit score, the better are your chances of getting home loans at competitive rates.
3. In order to have a good credit score, it is important to ensure timely credit card payments without any defaults.
4. Even late payments and subsequent fines have an impact on credit worthiness.
One must try to maintain a good credit worthiness score which will result in faster home loans or other loan approvals and will also enhance your chances of getting a competitive rate for your loans.
Some resources to help you maintain a Good Credit Rating Score.
Credit Score Rescue Plan: A Proven Credit Repair Strategy for Your Financial Life – Nick Stevens – Buy Now
Unlock the Power of Your Credit Score – Arun Ramamurthy and Gaurav Wadhwani – Buy Now
Hope you enjoyed this article on the importance of a Good Credit Rating Score.Tags: CIBIL, credit cards, credit rating, credit score, loan approval