One requirement that must be satisfied even when reserving a car or applying for a pre-owned car loan is the CIBIL score for loan applications. A good CIBIL score is necessary to qualify for a car loan or pre-owned automobile loan since it assures the lender of the borrower’s financial responsibility and capacity to make payments on schedule. This aids lenders in estimating their level of risk. They then use this score to assess the application penalties and even the post-approval repayment terms.
A higher CIBIL score boosts your chance of receiving a loan more quickly and will undoubtedly aid in your ability to negotiate better terms, such as reduced interest rates and longer repayment periods. However, having a low CIBIL score can reduce a person’s chances of getting a loan approved and result in unfavorable loan terms.
What is a CIBIL Score?
Credit Information Bureau (India) Limited (CIBIL) is India’s leading credit rating agency. The agency provides a three-digit score to individuals that indicate their ability to handle credit. This score comes in helps whenever an individual applies for a loan or a credit card. Lenders generally do a CIBIL score check with a PAN card when determining eligibility for various loans, including car loans and Pre-owned Car Loans. This score is calculated on the basis of repayment history, financial behaviour and a few more factors and it ranges between 300 and 900, with a higher score indicating a better credit-handling ability.
The Ideal CIBIL Score Range for Car Loans
Now that the importance of having a good CIBIL score to secure a car loan is clear, let’s look into what exactly is a good CIBIL score for car loan. The exact score requirement will differ from lender to lender, but, a CIBIL score of 750 or above is considered ideal for a car loan or Pre-owned Car Loan. If your CIBIL score lies in the range of 750-900, it assures the lender that the borrower has a healthy credit history and are likely to repay the loan timely. However, it’s important to note that even if your score lies in a range below 750, you may hold a chance to be eligible for a car loan, probably with potentially higher interest rates or unfavourable terms.
Along with the CIBIL score individual loan approvals depend on various factors like income, employment history, lending institution’s policies and debt-to-income ratio. It is always advisable to check various lenders and their policies before zeroing in on one lender. Credit Success offers Pre-owned Car Loans and even Auto Lease Loans at flexible terms.
Managing and Maintaining a Good CIBIL Score For Car Loan
In order to get a car loan at good terms it is crucial to maintain a CIBIL score above 750, so here are a few tips to help you maintain a healthy credit score:
Clear Bills And Dues On Time
Late and untimely payments can have a negative impact on your credit score. You must make it a priority to pay all your bills, EMIs, and credit card bills, on time.
Maintain Credit Utilization
Credit utilization refers to your credit card usage with respect to your available credit. It is advisable to keep your credit utilization under 50%. If you exceed your usage above 50% it indicates heavy reliance on credit that can be viewed as a risk by lenders.
Maintain A Good Credit Mix
Having a combination of various types of credit, such as credit cards and loans can positively influence your credit score. It demonstrates the borrower’s ability to manage financial obligations responsibly.
Keep Credit Inquiries To A Minimum
Every time one applies for a new loan or credit card, it generates a credit inquiry. Multiple inquiries within a short period can negatively impact your CIBIL score. Hence, it is advisable to limit credit inquiries and apply for credit only when required.
Regularly Check Your Credit Report
Your credit report contains valuable information about your credit history. You must periodically review your credit report to help identify any errors or discrepancies that may impact your score negatively. If you find any inaccuracies, you can report them to the credit bureau for rectification.
By following these basic guidelines, you can maintain a healthy credit profile and increase your chances of securing a car loan with favourable terms.
Conclusion
Armed with this information you can now keep a check on your CIBIL score regularly and fulfil your goal of owning a car with Credit Success. By keeping your score above 750 you can get a good deal with Credit Success, on Pre-owned Car Loans and Auto Lease loans.
Credit Success can help you check your credit score and prepare you to take a step towards owning your dream car. Additionally, we at Credit Success offer loans for many purposes. Be it a Personal Loan or even a Business Loan. With a wide range of loan products available with us, you can choose any to achieve your goals!
