Numbers can be intimidating to all of us. Believe it or not, numbers hold the ability to reflect our performance. Higher the number of goals and assist credits, the better is the player. The same goes for the CIBIL score scale. Higher your credit score, the higher your chances of getting a loan approved.
Well, learning about the exact categories in a CIBIL score scale can be overwhelming. Even my friend Ragini, who was planning to buy a house had a hard time understanding the categories. That’s when I came up with an easy solution to understand the categories better. I gave each category a name. As interesting as they were, it made the entire process easy for her to understand. If you share similar difficulties as Ragini, read the article till the end.
Before jumping into the listicles, it is important to understand – what is a CIBIL score? CIBIL score determines your chances of getting a loan or credit card from a bank or any other money lending company.
So, let’s find out in which category does Ragini stands on the CIBIL score scale?
Below 600: A chasm!
If your CIBIL score falls below 600, it is likely that lending institutions will not approve your loan. If it falls under the category of a chasm a.k.a., a bottomless hollow, the lenders will be reluctant to give loans as they fear that they cannot recover the loan amount. Having a lower CIBIL score makes it difficult for the loan application to be approved.
But you can always improve your CIBIL score by making proper repayments of your loan amount over time.
600-649: Need 6 runs off 1 ball
If your CIBIL score is anywhere between 600-649, consider yourself a batsman who needs to hit a six in the last ball of the match. The chances are low, but your lender may consider approving your loan considering other factors like income, age, assets, etc. It can hardest to get a credit card approval also if your CIBIL score is between 600-649. As stated before, you can always improve your credit score over time by proper repayment of your existing loans. You can also provide asset collateral or have someone be a co-signer for your loan to increase your chances of loan approval.
650-699: An average scorer!
If your CIBIL score falls under this category, you are an average scorer. This means that although your options are limited, your lender will approve your loan or credit card request. You can manage to get a decent loan amount with a manageable interest rate or credit limit.
If you manage to get a decent loan amount or credit limit, make sure you pay off the loan or credit amount in full and on time. Also, remember to make sensible purchases and do not use more than 40% of your credit limit. This way you can build trust with your lender and your lender may increase your credit limit in the future.
700-749: A trustworthy borrower!
If you are a trustworthy borrower, you are the most reliable applicant for a lender. A score between 700 – 750 means you’ve got a good ability to manage your income and expenses on a monthly basis and are generally good with finances. You can also avail of a loan or a credit card with better interest rates and flexible credit limits. Lenders always prefer those who have disciplined credit behavior. It makes you a safe pair of hands for your lender to invest in.
750-900: A credit master!
A credit master is marked as an excellent applicant in the books of the lending institute. If your CIBIL score falls anywhere between 750-900, you enjoy favorable interest rates and credit limits. A credit master is considered to be a pro, mastering the art of debt repayments and credit utilization.
While it’s perfectly okay to flex your excellent credit score, it’s also important to maintain it. Remember, it is all about consistency in debt repayment. In case, you are struggling to get a good CIBIL score, you can always improve it over time.
Luckily, Ragini turned out to be “a trustworthy borrower” which makes her a reliable applicant for getting a home loan with a lower interest rate.
If you want to find out where you stand in the CIBIL score scale, remember the above-mentioned names to make the process easier. To start with check your CIBIL score here.