You may already be aware that a good credit score helps lower interest rates on loans. However a CIBIL score is utilized by lenders and other to understand your financial status health in many different ways than just offering loans or credit cards.
Here are some facts about how your credit score is used and by whom:
1. Banks and Lenders
Financial institutions utilize CIBIL score for determining your creditworthiness. In case you apply for credit card or a loan, the loan provider will refer to your credit information before approving or rejecting a loan, and in case the same is approved, the interest rate will be decided on your credit score and report.
If you apply for a job in a company that is mainly from financial sector or otherwise, then your credit score will be assessed for deciding if you are eligible to secure the job or not. The credit report will help the employers to know your financial journey, which includes information about credit taken, amount repair or pending, missing repayments if any, interest paid, credit applications or enquiries made etc.
Landlords on the other hand check your credit score to understand how much of deposit amount they need to take from you. They are also interested to know if you have ever defaulted in repayment or have settled credit in the past, while knowing your ability to pay the rent on time. Thus your credit report will inform them about your economic records and give them an approximation if you are eligible to take the property on rent or not.
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