What is credit score & why is it important?
The
State Bank of India recently announced interest rate on home loans at just
6.65%. But not everyone can avail the loan at such a low rate. For that, his or
her credit score has
to be excellent.The country’s
largest lender is providing home loans at attractive interest rates for those
with good credit scores. And not just loans, a decent credit score will
also help you get credit cards too.So
a good credit score helps
you avail personal, consumer and other types of loans and credit cards easily.
But, what exactly is the concept of credit score? Let us find out.
There
are four credit information companies or credit bureaus in India whose credit
scores are popular with both lenders and borrowers.
These
are TransUnion CIBIL, Experian, Equifax, and CRIF High Mark.A borrower’s credit score ranges between 300 and
900. For a bank or lender, your credit score reveals your creditworthiness as a
borrower.
Scores that are at least 750 or above are deemed to be good.Your credit score is based on your credit
history, which encompasses whether you have been making timely repayments, the
number of times you have borrowed, the amounts you have borrowed, the type of
loans you have availed of, and other relevant factors.Timely repayment of EMIs on loans as well as
credit card bills is also an important factor.The
score is assigned to you based on your data mentioned in the Credit Information
Report, or CIR.
For
example, Experian’s CIR has detailed information of the concerned person's
credit and loan history, including identity information, credit cards, credit
accounts, loans, payments, and recent enquiries.
Comments
Post a Comment