What is a Good Credit Score In India?

Ever wondered why a credit score is significant in the financial world? Well, your credit score is what represents your true financial health and creditworthiness. This score helps lenders assess your credit or loan repayment capabilities. That’s why when you maintain a good credit score, you easily get your loans approved, whether it is a personal loan, car loan, or home loan.

With this brief guide, let’s understand what is a good credit score, the benefits of a good credit score in India and tips to maintain good credit health.

What is a Credit Score?

A credit score, in simple words, is a three-digit number that represents your creditworthiness. It ranges from 300 to 900 and tells about your credit history including your repayment history, debts, and other loan-related transactions. The better the credit score, the higher the chances of getting a loan approved.

Different Credit Score Ranges in India

Wondering how much credit score is good enough to get a loan? Well, let’s find out! Here is a breakdown of the credit score ranges used in India:

CIBIL Score Range Creditworthiness Approval Probability
300 to 600 Poor May get rejected
601 to 700 Low Difficult to get new credits
701 to 749 Fair Eligible for loans and credit cards
750 to 799 Good Easier to get new credit and loans
800 and above Excellent Get loans and credits at low interest rates as lenders consider you a low-risk borrower

Reasons to Maintain a Good Credit Score

Now, let’s explore the major reasons you should work on improving your credit score. Here are the significant benefits of a good credit score:

  • Get Easy Access to Loans

  • When you apply for a loan or a credit card while having a good credit score, the chances of approval are quite higher. Whether it is a home loan, car loan, or personal loan, lenders often prefer borrowers with a good record of credit management.

  • Avail Low Interest Rates On Loans and Credits

  • With a good credit score in India, you can easily avail loans and credit cards with lower interest rates. These low interest rates help you save money as you would be paying less interest over the loan tenure.

Also Read: Why Should You Avoid Availing Fast Loans With a Bad Credit Score

  • Quick Credit Card Approvals

  • Credit card issuers often check your credit score before approving your application. So, if you have a good score, it would increase the chances of your credit card application being approved.

  • Higher Credit Limits

  • With a good credit score, you can also enjoy higher credit limits or loan amounts, which would not be possible with a poor or low credit score.

  • Great Negotiating Power

  • A good credit score also allows you to negotiate with lenders for better loan terms. You can always request lower interest rates or higher credit limits based on your creditworthiness.

Tips to Maintain a Good Credit Score in India

how to maintain a good credit score

Here are some tips you can consider to maintain a good credit score:

  • Make sure you always pay your loan EMIs and credit card bills on time as timely payment of your debt will help you increase your credit score.
  • Always keep your credit utilisation low as higher credit utilisation is often looked at as a financial strain and hence, can lower your credit score.
  • Check your credit report on a regular basis so that you are always aware of your score. Moreover, if you monitor your credit report, you will be able to report any errors or inaccuracies at the right time.
  • Do not apply for multiple loans or credit cards within a short period.
  • Have a mix of credit cards and loans to positively impact your credit score.
  • Do not close old credit accounts as doing so can shorten your credit history and eventually lower your score.

Also Read: 5 Facts about CIBIL Scores You Probably Didn’t Know

Conclusion

Maintaining a good credit score in India not only helps you get easy access to funds but also provides you with higher credit limits. Looking for an easy loan to build your credit score? Download the CASHe mobile app and avail an instant personal loan without any collateral within a few minutes. On the app, you can also apply for a car loan, two-wheeler loan, education loan, and home renovation loan.

AUTHOR
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CASHe Team Welcome to the CASHe blog, your trusted source for insightful articles on personal loans, credit lines, digital gold, finance, lifestyle, and more. Our team at CASHe is a dedicated group of writers, editors, and subject matter experts passionate about simplifying finance for our readers.

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