Tuesday, 3 November 2015

Looking to buy a new car this Diwali? Check your CIBIL score first

Diwali is synonymous with crackers, lots of sweets, lights and new beginnings and of course buying new things especially on Dhan Teras! So you have decided to buy a new car; you have shortlisted the model of your choice, have a color in mind, have researched about the best deals available but have you checked your CIBIL Score? In case you are wondering what does the CIBIL score got anything to do with your car shopping for Diwali; read on.

Why Check Your CIBIL Score?
Be it a four wheeler or a two wheeler people generally prefer to buy it with the help of an automobile loan. Loans are available fairly easily, processing is fast and one does not have to wait long (for accumulating sufficient funds) for fulfilling their dreams. Before you apply for a loan check your CIBIL score so that you are not caught unawares in case your application is denied due to a low CIBIL score. In case there is time you could take steps to improve CIBILScore

When you approach a bank for a loan whether an auto loan or a home loan apart from the documentation and eligibility criteria the CIBIL score is important. Even if you have the required documents and meet the eligibility criteria, if your CIBIL score is not up to the financial institution’s acceptance level your application will be rejected. Before processing your application the bank seeks your credit score from CIBIL and then goes ahead with the next step. A low credit score could lead to your loan application being rejected.

The CIBIL score is a reflection of your financial health and also an indicator of how you treat your debt. A good CIBIL score is an indicator that you are a responsible borrower and a low one obviously reflects the opposite. Bankers would like to lend to those people who have a responsible attitude towards their debt whether loans or credit card dues.

How Does a CIBIL Score Help You?

A healthy credit score is beneficial for you as a borrower in case you are looking to take a loan. The most obvious advantage is that it helps you by getting your loan application accepted; a poor credit score leads to the application being rejected. Here it is important to mention that different financial institutions will have a different threshold level at which they are willing to lend depending upon their policies. There are loans for low credit score too but obviously at higher rates.

So how else does a good CIBIL score benefit you? If you have a good CIBIL score then the balance tilts in your direction. Since you know that most financial institutions will be willing to sanction a loan to you; you can choose the lender which offers most favorable conditions whether it is in terms of interest rates, processing fees or the tenure. Thus as a customer you have a wider choice with a healthy credit score; you can benefit financially as a result of a high credit score. A healthy CIBIL score also ensures faster processing of the application and you also save time since you will not be forced to apply elsewhere in case your loan application gets rejected.

How to Check your CIBIL Score?

Now that you know why your CIBIL score is important and how can it help you it is the time to find out how to get your CIBIL score. You can get your CIBIL score by filling out a simple form online. The form requires filling up some details for authentication purposes and the report is emailed to you the same day. 

If you feel that your score is not in the best of conditions then you could choose to apply to a FI that might be willing to lend at your score but this decision should be made after careful consideration. Since Diwali is close there is not much time for you to do something about your credit score; however if the score is low due to an error on part of the bank or the rating agency then you still have time to get it rectified and then apply for a loan.
So have a safe Diwali and fulfill your dream of buying a car!

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