In this 21st century, consumers have a wide variety of goods and services to choose from. Thanks to the increase in the consumption power of the people, there are a wide variety of companies offering their products and services for sale, thereby giving you the choice to choose the best product at reasonable prices. This scenario is present in all business areas; be it FMCG, loans, insurances etc. Therefore it is mandatory for you to choose the services depending upon your requirement.
Let us consider the banking sector, if you are applying for a loan or a credit card, banks will first approach the Credit Information Bureau of India Ltd. (CIBIL) and look into your Credit Information Report (CIR) and check your credit score. A customer’s credit score can tell a lot about their credit history. It shows the repayment capacity of the customer and enables the bank to forward loan to those customers who have a credible repayment capacity. The bandwidth of the credit score is to 300-900, wherein a score of 900 shows a high credit score making your application to be approved by most banks. If you have a lower credit score it might be difficult for your loan application to be approved. But it has been observed that, banks lend to those customers who have a minimum credit score of 750 and above. But apart from the credit information, banks look into other credentials like, your professional qualifications, income-to-debt ratio, residential status, etc, while deciding on your loan application. Therefore it is important that you maintain a good financial record and ensure that your credit history does not carry any dues that can make your credit score bend to the left.
How can you benefit from this?
You as a prudent customer, you can utilize this information and strike a good deal with the bank on your loan and take good advantage of it. If in case you are buying a loan, say a home loan, here is what you need to do:
- Try to do a little research about the home loan providers available in the market and choose from among them those lenders who fit your financial requirements.
- Make sure that you have all the necessary documents in place. Documents like your PAN card copy, passport copy, form 16 for the last two years, six months banks’ statement and any other documents as required by your lender need to be submitted along with your application.
- Also, make sure that you keep your credit score and credit report when you are speaking to your lender for any clarifications
- If you have a guarantor or a co-applicant for your loan, ensure that their documents and their credit score and credit report are in order since they will also be required by your lender to verify.
- Once you have all your documents in hand, the next step is to approach the banks that you have shortlisted and strike a deal with them. You need to specify your credit score and your credit report and bargain with your lender to provide you a better terms and conditions format. You can even bargain on the loan processing time, tenor etc.
- Once you have managed to meet your prospective lender, the next step is to choose the option that is most viable for you according to your finances, and also choose the lender that is willing to provide competitive terms and conditions and flexibility in repayment options.By utilizing this information, you will be in a position to sign up the best home loan deal which not only provides you the debt at lower interest rates but also bag the offers that the lender provides.