650 Credit Score: Is it Good or Bad?

Having a credit score of 650 puts you in a moderate position on the credit spectrum. This score suggests that you are managing credit responsibly, though there may have been some financial challenges in the past. 

 

While a 650 CIBIL score doesn’t qualify as excellent, it indicates a reasonable level of creditworthiness, and there is potential for improvement.

 

When lenders review applications with a 650 score, they may approach cautiously. They might also review your credit history closely. This may lead to stricter conditions or slightly higher interest rates. However, it’s still feasible to secure credit and loans if you have a credit score at 650.

 

Let's examine what a credit score of 650 means, its implications, and ways to improve it.

Each credit bureau in India has its own scoring model, so it’s beneficial to understand how a 650 credit score is perceived. 

 

Different interpretations help you understand your overall creditworthiness and what options you have for loans or credit cards, as well as applicable interest rates.

 

Here’s what a credit score of 650 signifies across different credit bureaus in India in 2024:

Here are some key implications of a credit score of 650:

Moderate Credit Options

At this score, you still have some moderate credit options available just like the credit scores under 650. However, a good sign is that lenders may be willing to extend credit. You might get fewer options, but securing a loan is possible.

Slightly Higher Interest Rates

Looking at the moderate nature of your score, some lenders might offer loans with slightly higher interest rates. However, these rates are still better than the interest rates offered to the lower credit scores.

Loan Approvals with Certain Conditions

With a CIBIL score of 650, your loan application may require additional checks or stricter terms. Your loan might get approved, although additional documents like proof of stable income, etc. may be needed.

Less Demanding Collateral Requirements

Although lenders may consider collateral, a CIBIL score of 650 means that the demand might likely be lower than for the scores below 650. However, here other credit factors need to be strong enough for this to happen.

To increase your CIBIL score 650 to a higher range, consider the following strategies:

Diversify Your Credit Portfolio

Having different types of credit accounts such as credit cards, loans, mortgages, etc,  demonstrates your ability to manage different credit types. This helps the lender trust you.

Monitor Your Credit Report Regularly

You need to take a frequent look at your credit report to understand and spot errors or discrepancies as early as possible, helping you correct them promptly.

Make Timely Payments

If you consistently ensure on-time payments on all dues, it shows a responsible credit behaviour and is crucial for boosting your score.

Avoid Overusing Credit

Even if you get an approval for a certain credit limit, try not to fully exhaust your credit limit. It basically indicates your financial reliance on credit. Instead, try to utilise a lesser amount than the limit. This shows you are not dependent on the credit entirely.

Minimise New Credit Applications

As much as possible, try to avoid applying for multiple loans or credit cards simultaneously within a short period, as it might indicate you are facing financial instability.

A 650 credit score places you in a moderate credit category, offering a reliability and option for improvement. By maintaining consistent financial habits, you can raise your score over time, allowing for better credit terms in the future.