What Is A Good CIBIL Score Value In India?

Your CIBIL score plays a crucial role in shaping your financial journey. Any time you apply for a credit card or a Personal Loan, the lender will always check your CIBIL score before making a decision. So, what is a good CIBIL score? Generally, a score greater than 750 is considered a good credit score.

This blog will cover everything you need to know about a good CIBIL score in India. Read on to learn more!

CIBIL Score Ranges in India

Here are different CIBIL score ranges that will help you to determine your creditworthiness:

A score above 750 indicates a history of making on-time payments, demonstrating financial responsibility. It signals financial stability to lenders and helps you maintain a healthy credit profile.

What is the Ideal CIBIL Score in India?

For the majority of borrowers in India, the ideal minimum credit score is 750 or higher. If you have a score at this level, lenders will view you as a low-risk candidate for credit. You can enjoy easy access to higher loan amounts, longer loan tenures, and lower interest rates.

The ideal score always varies slightly based on the purpose of the credit. The following are some examples of these loans:

If your score falls below these ranges, you may still qualify by providing additional documentation or collateral; however, the approval process may be stricter.

Importance of Your CIBIL Score

Your CIBIL score indicates your financial discipline and credit repayment habits. It is one of the first things that banks and non-banking financial companies (NBFCs) check before they approve loans or credit cards.

A strong CIBIL score, which is crucial for Personal Loan eligibility, improves your loan approval chances. It also allows you to enjoy competitive interest rates on personal, home, and business loans. It builds trust with financial institutions by demonstrating that you are a responsible borrower who makes timely payments.

Conversely, a low CIBIL score can make it difficult to access credit. Even if you qualify, the loan may come with higher interest rates and shorter repayment tenures.

Factors Affecting Your CIBIL Score

Consider these important factors affecting your CIBIL score:

Payment History

Your score is most deeply affected by payment history. Your CIBIL score can be lowered quickly due to missed payments or late payments of credit card bills or loan EMIs. Paying all your credit accounts on time will help you have stable and positive credit.

Credit Utilisation Ratio

The credit utilisation ratio is the percentage of your used credit limit compared to your total available limit. Keeping your credit utilisation below 30% indicates that you are not overly reliant on borrowed money. A high credit utilisation ratio can lower your CIBIL score, even if you make timely payments and have multiple credit enquiries.

Credit History

A long, clean credit history is beneficial. As lenders want to see that you can manage your debt over a longer period. If you are a new borrower, consider using a secured loan, a credit card, or an Instant Personal Loan, and ensure you repay it on time to build a positive credit history.

Credit Mix

A balance of secured and unsecured loans, like a mortgage, an auto loan, and a credit card, is beneficial for your credit rating. If you have only one type of loan (for example, only unsecured credit cards), you may not be demonstrating your ability to manage different types of debt. The credit information companies usually require this to assess your financial behaviour.

Multiple Loan Applications

When you apply for a new loan, lenders pull a hard inquiry into your report. Having multiple hard inquiries within a short time can potentially lower your score. Avoid submitting applications for various loans simultaneously, as it may signal to lenders that you are credit-hungry or experiencing financial difficulties.

Impact of Outstanding Debt on CIBIL Score

Outstanding debt or existing EMIs can negatively affect your credit score. The higher your current debt, the greater the perceived risk to lenders. This is because it indicates a higher repayment burden and a lower capacity to take on new credit responsibly.

It is important to engage in responsible credit management, repay loans on time, reduce credit card balances, and monitor your overall credit profile and liabilities. Paying down debt will naturally improve your CIBIL score and overall creditworthiness.

To Conclude

Your CIBIL score is more than just a number; it reflects your overall discipline as a borrower. You can manage your credit effectively by understanding what makes a good score and how it affects your access to loans.

By spending responsibly, repaying obligations on time, and following sound financial practices, you can steadily build a strong CIBIL score. Regularly reviewing your score helps safeguard your financial foundation and provides you with greater options in the future. Check your free CIBIL score today and stay financially prepared with a strong credit history!

Read Also: Essential Credit Score Monitoring Tips for Better Financial Health

FAQs

What is a good credit score in India?

In India, a credit score of 750 or higher is considered good. Such a score shows responsible credit behaviour and improves your chances of getting loans at competitive interest rates.

What is the minimum CIBIL score for a Personal Loan?

Most lenders prefer a score of 700 and above for the approval of a Personal Loan. However, this requirement can vary between banks and NBFCs.

How often should I review my CIBIL report? 

Check your credit report at least once every six months to ensure accuracy. This helps confirm that no mistakes or inaccuracies are impacting your score and maintaining your credit health.

Would closing old credit cards lower my CIBIL score? 

Yes, it can. Closing old credit cards may reduce your overall available credit and shorten your average credit history. Both of these can slightly lower your CIBIL score.

How long does it take to improve a low CIBIL score? 

If you make timely payments and maintain responsible credit behaviour, you can start seeing improvements in a few months. However, achieving a high CIBIL score generally takes consistent credit discipline over a year or more.