Credit Score: What is it and how does it affect your loan approval?

If you are someone who is interested in borrowing a loan or if you want to apply for a credit card, then knowing your credit score is extremely important. Lenders also pay close attention to your credit score for granting you the interest rate, repayment tenure and principal amount for your loan. Nevertheless, it is interesting to note that the CIBIL Score is the most popular and commonly utilised credit score in India. The CIBIL Score is a 3 digit numeric representation of your credit history which roughly reflects your credit spending habits as well as your past defaults if any. Let us understand the CIBIL score ratings in detailed; Credit score Status Meaning 800 and above Excellent Low-risk borrowers, easier to secure a loan at preferential terms 750 to 799 Very Good Good credit history, easy to get the credit application approved 701 to 749 Good Can get loans and credit cards, good scope for improvement 651 to 700 Average ‘Subprime’ borrowers, difficult to qualify for new credit because of the high risk of default 300 to 650 Poor High chances of credit rejection if applying at this score, focus on rebuilding the credit score How does CIBIL score affect your borrowing?