Does CIR play an important role for getting a loan?
Of course yes! It’s like, CIR is your everything when you want to opt for a loan.
CIR i.e. is a detailed report about your credit card payments, loan payments and how well you maintain the account balance. Payments on-time gives you a good credit score. These payments do not include your investments and savings. But, it definitely includes your credit-card bill payment and loan payments. However, if you don’t pay your loans and credit bills on-time, it’s surely going to affect your credit score.
Your Credit Information report is not only about the payments but also about enquiries by the bank for knowing your credit score. Apart from these, quite obviously the report includes all your personal and account details in depth.
While your Credit Information Report is purely dependent on your credit score, let’s know more about it
What’s a Credit Score?
A 3-digit magic number that can lend you help by the bank or reject all your loan and credit-card enquiries. These credit scores let the bank decide how responsible you are for clearing your debts. A good credit score in India is anything above 750 and ranges between 300 to 900. The closer you are to 900, the better are your chances for getting your loan approved with lower interest rates.
While CIBIL credit bureau calculates our credit score, here are their score range along with what it means for us.
Image Source: Credit Mantri
How does a Good Credit Score help?
1) Better chances of loan approval
When you apply for a loan, the first thing that the lender checks for is your credit score and then is your income. A good credit score range is self-explanatory for the lender that you are disciplined with your payments. Irrespective of your income, a good credit score turns out to be a savior from loan rejections.
2) Lower interest rates
Who loves to pay interest? None of us! But with loans, comes interest. You easily safeguard yourself with higher interest rates when you have a good credit score. For example, you purchase a new house with a home loan of a larger amount.Having a bad credit score will end up adding an interest rate above 6.75% for your home loan. However, with a good credit score, you make yourself eligible for the base interest rate i.e. 6.75%. This will definitely reduce your stress of repaying the loan amount and save ample money in the near future.
3) Best Credit Limits
What would you do if you wish to purchase a car which doesn’t fit your pocket? Either you opt for a car with a lower budget or you purchase the same with a car loan. You won’t pass through the loan approval process if you have a lower credit score. However, with a good credit score, you can easily avail a maximum loan amount.
Looking at the perks of having a good credit score, one must try their level best to maintain one. It’s not difficult to keep up with your scores but it is definitely crucial.
Here’s how you can maintain a good credit score.
Set reminders for your credit card bill payments in order to avoid delaying even a single day for payment.
Set a credit limit bar 20-30% below your credit limit. Or, you can simply use cash if you think it is exceeding your credit limit bar.
Close the credit cards which are not in use.
Let your credit history be lengthy and self-explanatory for the lender while you approach for a loan.
But yes, not everyone has a good credit score. There might be many who have a poor credit score and it’s not wrong. It can be made right by improving the credit scores with payments on-time and lower credit utilisation.
So, if you are planning to apply for a loan, check your credit scores on credit bureau sites like CIBIL because they have the most accurate credit scores.Yes, it undoubtedly takes a lot of time to build a good credit score but it surely is the most crucial thing if you want to opt for a loan in the future.