Healthy financial practices, which include savings, investment, and cautious spending, have a significant positive impact on the stability of individuals. These practices have an effect on our overall lifestyles and on our ability to achieve our goals, dreams, and aspirations. A strong indicator of the financial health of an individual is the credit score, also known as the CIBIL score.
The calculated credit score is applicable when applying for a loan and is an indicator of the ability to repay. This three-digit number ranges between 300 and 900, and a higher score is more financially beneficial for a loan application. A credit score closer to 900 indicates a higher ability to repay a loan or pay for a credit card.
An excellent credit score is a value above 750 and ensures better access to credit cards and loans from banks. A score between 650 to 750 is a good number, which means an individual can apply for loans relatively easily. A low score below 650 will have an adverse effect, and a score below 600 will not secure a loan.
The credit score is calculated based on data points, including credit history, history of credit card payment, and outstanding loans. Simply paying EMIs and credit card bills in a timely manner can significantly affect the credit score of an individual. To improve your credit score, you must ensure timely payment of EMIs and credit cards and avoid taking multiple loans.
Your eligibility for a loan is impacted by your credit score, and the higher the value, the better your chances. Loan eligibility is determined based on several deciding factors, including the credit score, EMIs, if any, and your current income. Be conscious of maintaining a high credit score, which is a sign of financial health and stability in the future.
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