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Know if a 500 credit score is good or bad, and how does it affect your financial health.
Having a 500 credit score is a wake-up call for your financial situation. It indicates that you might be facing challenges in managing credit. However, you still have an opportunity to improve your credit score.
Whenever lenders get any loan application with this score, they usually treat it with caution. It implies that the lender might not be able to trust you and could ask for higher interest rates. Lenders may also impose stricter terms and conditions to ensure smooth debt settlement.
Let’s understand the 500 credit score in detail, what are its implications, how to improve it, and more.
Every credit bureau in India has its own credit scoring model. Hence it's important to understand how each of these credit bureaus interpret this credit score.
This variation is helpful for you to analyse your creditworthiness, as it impacts your ability to get loans or credit cards, alongside the corresponding interest rates.
Here’s what a credit score of 500 means across different credit bureaus in India in 2025:
| Credit Bureau | Credit Score Range | 500 Credit Score |
|---|---|---|
TransUnion CIBIL |
300 - 900 |
Bad |
Experian |
300 - 850 |
Poor |
Equifax |
300 - 850 |
Poor |
CRIF High Mark |
300 - 900 |
Poor |
Here are some key implications of a credit score of 500:
If you have a 500 credit score, or unfortunately your credit score is under 500, lenders might feel reluctant when extending credit to you. This could result in very few credit options for you.
Having a CIBIL score of 500 means that even if some lenders decide to trust you, they might offer loans at higher interest rates, thus increasing the overall borrowing cost
You might face challenges in getting a loan, especially without a collateral
You also might have to follow some strict terms and conditions along with some kind of impositions like automatic repayments
Lenders might want you to provide a high-value collateral for your loan requirement
To improve your 500 CIBIL score to a higher one, here are a few ways through which you can improve it:
Ensure you pay your dues on time, as this way you can show a responsible credit behaviour
Do not take too many loans at a time, as applying for multiple loans simultaneously can signal financial distress
Try to maintain different credit accounts like loans, credit cards, mortgages, etc. as having a mix of credit types you can show lenders that you can manage various forms of credit responsibly
Always ensure to keep a check on your credit report, as frequent monitoring of your credit report helps you catch errors or fraudulent activity early, allowing for timely corrections
If possible do not utilise your credit limit to the full extent, as it indicates that you are not overly reliant on credit
Having a 500 credit score might be disheartening, but you should realise that you can still improve your credit score over time with the right efforts.
The quickest way to improve a 500-credit score is by making on-time payments, reducing credit card balances to below 30%, and fixing errors on your credit report. Avoid missing payments and consider using a secured credit card to build a positive credit history.
Yes, a 500-credit score can be improved within a year. By paying off outstanding debts, maintaining low credit utilisation, and addressing any negative marks, you can gradually increase your score. Consistency and responsible credit management are key to achieving significant improvements.
Yes, individuals with a 500-credit score can get credit cards, but options may be limited. Secured credit cards or cards designed for rebuilding credit are ideal, often with higher fees and lower limits. These cards help improve your score when used responsibly.
Getting a loan with a 500-credit score is possible, though challenging. You may need to apply with specialised lenders who offer loans to individuals with low credit scores. Expect higher interest rates and stricter repayment terms. A co-signer may also improve your chances.
With a 500 CIBIL score, the amount of a personal loan depends on the lender’s policies. Typically, you may qualify for smaller loan amounts and higher interest rates. Lenders may require collateral or higher income proof to approve your application.
Improving a 500-credit score to 700 typically takes 12 to 24 months. Consistently paying bills on time, reducing credit card balances, and resolving negative marks on your credit report are essential. Your progress will depend on how quickly you implement positive credit habits.
To improve a 500-credit score, focus on making timely payments, reducing your credit utilisation, and paying off outstanding debts. Regularly check your credit report for errors and avoid applying for new credit. Consider using a credit builder loan or secured credit card.
A good CIBIL score typically falls above 750. Scores in this range make it easier to obtain loans and credit cards with competitive interest rates. A higher score demonstrates strong creditworthiness, showing lenders you’re likely to repay your debts on time.
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