The festive season is a time when people come together to celebrate, exchange gifts and spread happiness. It is a time when people want to splurge on their loved ones and buy new things for themselves. However, with the pandemic still looming over our heads, many people might be hesitant to spend money. This is where a good CIBIL score comes into play.
What is a CIBIL Score?
CIBIL score is a three-digit number that represents an individual’s creditworthiness. It is calculated by Credit Information Bureau (India) Limited (CIBIL) based on the individual’s credit history.
A good CIBIL score is an indication that the person has been responsible with their credit and has a good track record of repaying their debts on time.
How can a Good CIBIL Score Help You Celebrate the Festive Season Better?
Here we explain how a good CIBIL score can help people celebrate the festive season better and also discuss the benefits of a good CIBIL score, such as lower interest rates, higher credit limits and access to special offers.
Lower Interest Rates on Loans and Credit Cards
One of the biggest advantages of having a good CIBIL score is that it can help you get lower interest rates on loans and credit cards. During the festive season, banks and financial institutions offer various discounts and offers on loans and credit cards.
However, these offers are usually available to individuals with a good credit score. If you have a good CIBIL score, you can take advantage of these offers and save money on interest rates.
Higher Credit Limit
A good CIBIL score can also help you get a higher credit limit on your credit card. During the festive season, you may need to make big-ticket purchases.
A higher credit limit can help you make these purchases without worrying about the limit on your credit card. However, it is important to use the credit limit wisely and avoid overspending.
Faster Loan Approval
If you are planning to take a personal loan or a home loan during the festive season, a good CIBIL score can help you get faster loan approval.
Banks and financial institutions usually check an individual’s CIBIL score before approving a loan. If you have a good CIBIL score, the loan approval process can be faster and smoother.
Better Negotiating Power
Having a good CIBIL score can also give you better negotiating power with banks and financial institutions.
You can negotiate for better interest rates and lower processing fees on loans and credit cards. This can help you save money and celebrate the festive season without worrying about your finances.
Access to Exclusive Offers
Banks and financial institutions offer exclusive festive season offers to individuals with a good credit score. These offers can include discounts on shopping, travel, dining and more.
By having a good CIBIL score, you can take advantage of these exclusive offers and save money on your festive season expenses.
How to Maintain a Good CIBIL Score?
Maintaining a good CIBIL score is important if you want to enjoy the benefits mentioned above. Here are some tips to maintain a good CIBIL score:
Pay Your Bills on Time
One of the most important factors that determine your CIBIL score is your payment history. Make sure you pay your bills, credit card bills, and loan EMIs on time.
Keep Your Credit Utilization Ratio Low
Your credit utilization ratio is the percentage of your credit limit that you use. It is important to keep your credit utilization ratio low to maintain a good CIBIL score. Experts recommend keeping your credit utilization ratio below 30%.
Maintain a Healthy Credit Mix
Having a healthy credit mix can also help you maintain a good CIBIL score. A healthy credit mix includes a mix of secured and unsecured loans such as a home loan or car loan and unsecured loans such as personal loans or credit card debt. It is important to maintain a balance between the two.
Check Your Credit Report Regularly
It is important to check your credit report regularly to ensure that there are no errors or discrepancies. Errors on your credit report can negatively impact your CIBIL score. You can get one free credit report from CIBIL every year.
Avoid Applying for Too Much Credit at Once
Every time you apply for credit, it shows up on your credit report as a hard inquiry. Too many hard inquiries can negatively impact your CIBIL score. It is important to avoid applying for too much credit at once.
Conclusion: A good CIBIL score can open up a world of opportunities for you during the festive season. It can help you get lower interest rates on loans and credit cards, higher credit limit, faster loan approval, better negotiating power and access to exclusive offers.
By maintaining a good CIBIL score, you can enjoy the festive season without worrying about your finances. Remember to pay your bills on time, keep your credit utilization ratio low, maintain a healthy credit mix, check your credit report regularly and avoid applying for too much credit at once to maintain a good CIBIL score.
