CIBIL Score: The CIBIL score of a borrower is examined when he or she applies for a loan from a bank or another financial institution. The scale runs from 300 to 900 points. It is preferable if the score is higher. In general, a score of 750 or greater is regarded as favourable, and the chances of getting a loan are increased.

Only people with a strong CIBIL score are approved for loans or given credit cards by banks. The score and other credit information are included in the CIBIL report. After reviewing the CIBIL record, banks can determine the borrower's repayment discipline. It also provides a view into the person's credit risk profile, which banks use to determine whether or not to provide a loan. Here's why a good CIBIL score is vital and what a good CIBIL score can do for you:

Also Read: New RBI Rules for Credit and Debit Cards Effective July 2022

Cheaper Loans: Banks charge borrowers interest rates based on their risk profile. Banks may give a reduced rate of interest if a borrower's CIBIL score is high compared to those with a lower score.

Quick Loan Approval: Those with high credit ratings normally don't have to wait long for their loans to be approved. Financial organisations are more likely to grant loans to people with a high CIBIL score.

Higher Credit Limits: Taking large loans from banks necessitates a very high credit score because the danger is higher. When compared to people with a lower CIBIL score, you may be awarded a larger loan or a greater credit limit if you have a strong CIBIL score.

Pre-Approved Loans: If your CIBIL score is strong, your bank may give you pre-approved loans or credit cards, which is a terrific option for receiving a rapid personal loan.

Cards With Better Benefits: Credit and debit cards come with some benefits and rewards. Banks, on the other hand, give higher perks and prizes to people who have a strong credit payback history and, hence, a good CIBIL score.

On January 1, 2017, the Reserve Bank of India (RBI) made it mandatory for all credit bureaus in India to provide one free, complete credit report every calendar year, which may be seen on CIBIL's official website.

According to a PWC analysis, credit card issuance in India has expanded at a compound annual growth rate of 20% over the last four years. From March 2017 to March 2021, the number of credit cardholders climbed from 29 million to 62 million. In 2019 and 2020, it is expected to increase by 26% and 23%, respectively.

According to the latest RBI statistics, retail lending continues to fuel credit growth in India. According to an SBI research report, "Interestingly, retail loans have emerged as the main driver of bank credit in recent years and now have the largest share (30.5 per cent) of the outstanding credit of all scheduled commercial banks, displacing industrial loans (22.8 per cent). Within retail, housing loans have the largest share."