CIBIL Score 700 and above: Benefits when applying for a personal loan

Your CIBIL score gives a snapshot view of your creditworthiness to lenders. If you’ve managed to go beyond 700, your profile takes up a strong position. Lenders may prefer borrowers like you because it reflects responsible credit behaviour and a solid repayment history.

With a high score, you show that you are a low-risk borrower. Thus, you attract better terms and a favourable interest rate on loans and credit cards. Read ahead to explore the key benefits of having a good credit score and practical tips for maintaining it consistently.

Benefits of having a CIBIL score above 700

Reaching a CIBIL score above 700 gives you an upper hand while applying for credit. It involves the following benefits that only get better when you learn how to maintain a CIBIL score above 750 over time:

· Easy loan approvals

With a credit score above 700, you show lenders that you are a responsible borrower with a history of timely repayments. Hence, your chances of getting loan approvals without any lengthy verification formalities increase. As lenders perceive borrowers in a good CIBIL score range as low-risk, they make getting credit easier with relaxed parameters.

For example, for a FIRSTmoney personal loan, eligibility starts at a CIBIL score of 710.

· Faster loan processing

A CIBIL score of 700 or more may minimise the need for extensive verifications as lenders process your loan applications. You make the impression of a trustworthy borrower with a good score. Hence, lenders spend less time speculating on your profile if your income is also stable. This results in faster processing times and lets you get access to funds quickly in times of need.

· Attractive interest rates

The appealing interest rate offers you often see while comparing loans and credit cards are mostly reserved for borrowers with the highest CIBIL score. As you are close to it with a score of 700, you are likely to qualify for such favourable interest rates. As a result, your overall repayment burden and EMIs may be reduced, and you can enjoy financial flexibility to repay your dues smoothly.

· Access to premium offers

Some loan schemes and credit card deals are exclusively offered to borrowers with a good credit score. These may include pre-approved credit cards and loans, credit with zero processing fees, access to reward programs, and low interest rates. Lenders reserve these offers for the select few as a reward for a trustworthy credit profile. You can research and compare to get the best deal before you apply for credit.

E.g if you have a CIBIL score of 710+, you can apply for a personal loan of up to ₹10 lakh with FIRSTmoney.

· Better negotiating power

Some loan providers will reduce the interest rate and adjust the loan terms to make borrowing easier for you when your credit score is above 700. You may negotiate for lower interest rates, flexible repayment terms, reduced charges, and more. Lenders are more open to adjusting their terms to retain you when you qualify as a reliable borrower. You may get a competitive edge over borrowers with lower bargaining power and low scores.

· Higher credit limits

Banks and financial institutions may show a willingness to extend higher credit limits when you have a strong credit score. This helps you borrow for making big-ticket purchases, handling emergencies, or making considerable investments without waiting to build a corpus. However, with high credit limits comes responsible usage to protect your good credit score.

· Reduced dependence on guarantors

Depending on your credit limit or loan amount and cost of borrowing, it makes sense to have a guarantor to ease the loan burden. But a score above 700 may enable you to get substantial loans at a low cost. Hence, you may be in a better position to repay them comfortably. This, in turn, reduces dependency on guarantors or cosigners. You can borrow more confidently.

· Impact on future credit growth

If your current credit score is 700 and you continue to maintain, or preferably, boost it, you create a solid foundation for future credit opportunities. With a good credit profile, you can apply for larger loans, premium credit cards, or finance your business ideas with ease. You don’t have to hesitate or worry about qualifying for loans. You set yourself up for flexibility to make big money moves with greater borrowing power.

· Financial confidence

Maintaining a score in a good CIBIL score range is about gaining confidence when you apply for credit. When you approach your loan or credit card applications with a good credit score, you are better prepared to meet the eligibility requirements. In fact, with a favourable credit score, lenders will themselves approach you with attractive credit offers. An added perk with the confidence is the motivation to continue enjoying the benefits with disciplined financial habits.

· Better loan terms

As is evident by now, a good credit score changes the way lenders treat you. This means you typically receive favourable loan terms as you are viewed as a valuable applicant. You may get relief in terms of collateral requirements in secured loans, longer repayment periods, low processing fees, better rates, etc. All of this simplifies borrowing and makes getting and managing credit convenient.

How to maintain a CIBIL score above 750 consistently
 

Reaching a high score of 700 is an achievement, but your efforts don’t end there. Maintaining your carefully built credit score is just as important. It’s even better if you can increase it to 750 or higher and manage to keep it steady.

Refer to these practical tips to consistently stay in the good CIBIL score range:

· Pay on time, every time

Your repayment history is the basis of your CIBIL score. Every single missed EMI or delayed credit payment has an impact on your score. Hence, maintain a disciplined approach to repayments. Set reminders or automate payments to avoid delays or defaults.

· Use credit wisely

A high credit limit is good to have, but not good to exploit. Even if you can borrow more, try to keep your credit utilisation below 30% of the available limit. This way, you show that you have financial control and presents you as a low-risk borrower to lenders.

· Regularly monitor your credit report

Sometimes, your actions might not be harming your CIBIL score, but the errors in your credit report. Even as the most responsible borrower, your credit score can take a hit due to inaccuracies in your credit report. Make it a habit to check for such errors and dispute them with your credit bureau immediately.

· Avoid simultaneous credit applications

Applying for multiple loans and credit cards at once to increase your chances of approval attracts hard enquiries. These enquiries can bring down your score. Instead, you can plan your applications based on your eligibility and apply only when you are sure of the lender and their terms.

· Say no to co-signing unless necessary

Since you have a good credit score, you might want to help out a close friend or family member with their loan. While it is a noble decision, it can impact your credit score negatively. The primary borrower’s financial behaviour directly impacts your credit profile. Thus, it’s in your best interest to avoid co-signing unless you’re confident about the co-signee’s repayment capability.

· Prepare for repayments before applying

Even though you need to deal with the repayments after getting the loan credited, it’s always better to plan proactively. You want to evaluate your repayment capacity and plan out how you will manage your EMIs before you apply for credit. This way, you can make a responsible decision and maintain your credit score in the high range.

· Plan for emergencies

Emergencies like medical mishaps, home and car repairs, and other sudden expenses can disrupt your finances. When things get worse, the last resort is borrowing. Applying for credit under such circumstances often leads to poor choices. When not managed wisely, your credit score gets affected. Having an emergency fund to deal with such scenarios helps avoid this.

· Avoid stacking unnecessary credit

While it is good to have a healthy credit mix with diverse loans, it does not translate to borrowing unnecessarily. Plus, a credit score of 700 will let you borrow with good offers. Before proceeding, ask yourself if you need more credit and if it fits into your current debt-to-income ratio. Avoid overburdening yourself unnecessarily to protect your credit score.

Final words
 

Crossing the 700-credit score mark is proof that you have managed your credit well, and you will reap the many benefits for it as discussed above. Having understood what a good credit score is and how to maintain it, you are now prepared to create lasting financial stability.

Your consistent efforts may also lead to increasing your credit score further up to 850-900. No matter your score, the key is to continue with steady efforts to maintain your credibility.

If you are looking for affordable loan options with your current score of 710 and above, you can get up to ₹10 lakhs with FIRSTmoney Smart Personal loan by IDFC FIRST Bank. You can opt for a tenure between 9 to 60 months and benefit from zero foreclosure charges.