Banks and NBFCs provide data to credit bureaus on a regular basis to calculate the credit score representing the creditworthiness for availing credit like loans or credit cards. Credit Score of 750 and above is generally considered as a high score for availing credit by all the four credit bureaus i.e. CIBIL, Experian, CRIF Highmark, and Equifax. A high credit score indicates responsible credit behaviour of the applicant. Read on to know the benefits of a high credit score.
Benefits of a High Credit Score
While your credit score is not the only thing that a lender considers when evaluating your loan or credit card application, the following are some key benefits commonly associated with a high score:
1. Higher Chances of Approval: A high credit score indicates responsible credit behaviour, a clean repayment track record, and a lower risk of default for the lender which typically increases your chances of being approved for a loan or a credit card.
2. Lower Interest Rates: If you have a high credit score, lenders will provide you with a comparatively lower rate of interest for availing credit like a personal loan, home loan, or credit card.
3. Increased Access to Pre-approved Loans: A high credit score may also often increase your chances of accessing pre-approved loan and credit card offers when you check your credit score on Paisabazaar.com. These offers can give you quicker access to credit as they usually involve minimal documentation and shorter approval times.
4. Easier Access to Premium Credit Cards: Before approving a credit card application, one of the first things that lenders consider is the credit score of the applicant. As a result, credit card companies are more inclined to provide such applicants access to premium credit cards that feature better rewards in the form of reward points, cashback, privileged services, etc.
5. Approval for Higher Loan Amount/ Credit Card Limit: A high credit score can also increase your chances of being approved for higher limits on your loans and credit cards. This is because a higher score usually indicates a lower risk of default owing to your responsible credit behaviour.
6.Possibility of Approval for Longer Tenure Loans: A longer tenure usually involves a higher degree of risk for the lender. However, a high credit score may help you avail longer repayment tenure on your loan than those with a lower score. When a loan is repaid over a long period of time, it results in smaller EMIs, lower monthly credit burden and may help you manage your monthly expenses in a better way.
Also Read: How to download your credit report online?