A CIBIL score above 700 is considered good and offers myriad advantages, and reflects strong creditworthiness and good financial behaviour. For instance, someone with a good credit score offers easier loan and credit card approvals, lower interest rates and faster loan processing, among other advantages.
Superior credit score: These are the advantages
Quick approvals: A score above 700 or 750 shows banks that the applicant has a history of timely repayments and wise credit management.
Banks are more likely to approve applications for loans or credit cards. Scores above 750 are often seen as excellent, increasing approval chances with minimal scrutiny, as lenders perceive lower risk.
Loan and credit card applications from customers with high credit scores are processed more quickly. A credit score above 700 shows low risk, so banks may require less documentation or fewer verification steps, streamlining the approval process.
Lower interest rates: A higher CIBIL score often qualifies you for lower interest rates on loans and credit cards. Lenders offer competitive rates to borrowers with scores above 700 because they are seen as reliable.
For instance, a loan applicant with a score of 750 could secure a rate of 8 per cent, whereas someone with a poor credit score could be offered a rate of 10 per cent or higher. Lower rates reduce the overall cost of borrowing, saving significant money over the loan tenure.
High credit limits: A good CIBIL score means higher credit limits on cards and loans. Banks become more confident in offering larger credit amounts to customers with a superior credit score.
This is particularly beneficial for big-ticket purchases like homes or cars, where substantial funding is required.
Strong negotiations: A strong credit score gives applicants leverage to negotiate better terms with lenders. Whether it’s a lower interest rate, lower processing fees, or flexible repayment schedules, banks are better positioned to accommodate borrowers with high scores.
Pre-approved offers: Lenders tend to give pre-approved loan offers to customers with high credit scores. These offers generally involve less paperwork and are followed by fast disbursal.
Other tempting offers: Several premium credit cards and loan products are given to individuals who have high credit scores. A score above 700 opens access to such deals offering perks such as cashback, rewards or lounge access.
To sum up, a CIBIL score above 700 offers better loan terms, higher credit limits, and swift approvals while enhancing your overall financial standing.
Maintaining this score requires timely repayments, low credit utilisation, and regular monitoring of your credit report to ensure accuracy.
Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
For all personal finance updates, visit here