Top 5 Benefits of Having a Credit Score Above 750
Your credit score is more than just a number, a good score helps to unlock loan offers and negotiate better rates in the market.
A credit score is a 3-digit numerical number that is going to represent your creditworthiness for availing loans. Credit scores above 750 and above is highly considered lenders as the repayment capacity seems to be higher while on other hand lower score lead your loan application to rejection sometimes. So, it's necessary to understand the benefits of having a credit score above 750 to get easy loan approval. A good score could make you eligible for a personal loan and business loan.
Benefits of Credit Score Above 750
Individuals with bad credit always face several challenges fulfilling their financial needs but a good score above 750 helps the applicant to save money and makes the financial portion of life much easier. The following points are some of the benefits that are associated with a good credit score:
- Get Higher Loan Amount: Credit score plays a crucial role in determining the applicant loan amount. Most often applicants with low scores carry a higher risk of default. Hence, lenders won’t offer much while CIBIL scores above 750 make the applicant eligible to get a higher loan amount.
- Avail Lower Interest Rates: Generally, a lower CIBIL score is charged higher interest rates to compensate for the higher credit risk involved in funding. While if you have a higher CIBIL score, you will be offered lower interest rates by banks or financial institutions as it involves lower credit risk.
- Higher Chances of Approval: A higher CIBIL score usually indicates a lower risk of default and results in easy access to credit which means chances of being approved are much higher as compared to one with lower credit.
- Pre-approval Loan offers: Another advantage of having higher credit is getting pre-approval loan offers by lenders. A higher score may often increase chances of accessing pre-approval loans that come with better product features, it offers you lower interest rates and takes a quick turnaround time.
- Increase Chances for Longer Tenure: From the lender perspective, longer tenure involves a higher degree of risk. However, a higher score would help you to increase your chances of obtaining longer tenure loan repayment. Usually, a longer tenure results in EMIs affordability and makes your financial life much easier to manage, this will have less credit burden as compared to a lower score.
Tips to Improve Your Credit Score
Several factors impact your credit score including your credit history age, credit utilization ratio, repayment history, credit mix..etc. The following are the tips to improve your credit score:
- Lower Your Credit Utilization Ratio- Your credit utilization indicates the ratio of credit that you utilized on a given credit limit. Maintaining a lower credit utilization ratio of 30% or lower are considered to be lower dependence on credit that enables you to pay lower repayment and makes your profile higher creditworthiness. This would positively improve your credit score and help in securing additional credit.
- Check Credit Report to Rectify Errors- Always keep an eye on your credit report for any errors. If you find any errors that should be immediately corrected using prescribed dispute resolution procedures. This will help you to improve your score.
- Maintain Clean Payment Track Record – Do you know one single delay or missed payment would hardly hit your credit score lower? Credit history is the most important portion in sourcing one’s creditworthiness. His/her past history is going to determine current credit decisions. Because lenders want to be sure that you are good at paying payments timely. Therefore, ensuring that all payments are taking place on time will keep improving your credit scores.
- Avoid Multiple Loan Approaches- Avoid approaching a loan application with different lenders at the same time. This activity will hardly hit your credit report which adversely affects your score. Also, it reflects your profile as credit hungry.
- Pay-off Existing Debts- You must try to pay off your existing debts before you apply for any loan. Settling your existing debts may result in reducing the burden of debt and help to improve your credit score.
An excellent credit score enhances your chances of being approved and you are most likely to get lower interest rates with a flexible repayment option. Therefore, checking your credit score online makes it convenient to ensure that you are responsible enough and are keeping track of errors in your credit report.
Also Read: Top 5 Ways to Increase Home Loan Eligibility
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