If you’re looking to get yourself a two wheeler loan to buy yourself a bike, there are certain key things that you should take into consideration. Two wheeler loan interest rates and two wheeler loan eligibility criteria are two of them. In addition to these two, there’s also another one – your CIBIL score.
As a matter of fact, your CIBIL score also plays a major role when it comes to availing a two wheeler loan. Now, if you’re wondering what this score is, here’s everything that you need to know.
What is the CIBIL score?
The CIBIL score is essentially a three-digit numerical number that gives lenders like banks and financial institutions a preview of your credit worthiness. This is primarily why the CIBIL score is also referred to by many as the credit score. The higher the CIBIL score, the better your chances of getting a loan approved are. The score starts at 300, which is the lowest, and goes all the way up to 900, which is the highest.
What is the CIBIL score used for?
As you’ve already seen above, the three-digit CIBIL score is used by financial institutions to determine your two wheeler loan eligibility. If your rating is found to be low, lenders might not approve your loan application. On the other hand, a high rating is more favorable since lenders would be far more willing to grant you a loan.
What is the ideal CIBIL score for getting a bike loan?
The ideal CIBIL score for getting a bike loan tends to vary with the lender. While many lenders don’t offer loans to individuals whose score is below 750, others might be willing to offer individuals whose score is in the low 600s. But, if you wish to maximize your chances of getting a loan, it is always a good idea to have a credit score of 750 or above.
Is it possible to improve your CIBIL score?
Of course. There are plenty of different ways to improve your score. Here’s a quick look at some of them.
- Pay all of your loan obligations like your loan EMIs and your credit card bills on time before the due date.
- Don’t just stick to paying the minimum amount due on your credit card, pay the entire statement amount.
- Keep your loan enquiries and applications to a minimum. A high number of hard inquiries into your credit score can lower it.
- Refrain from utilizing your credit cards to their absolute maximum limit.
Now that you know how important the CIBIL score is when it comes to getting a two wheeler loan, always ensure that you keep it well above the 750 mark. This way, your chances of getting your loan application approved increases multifold.