726 Credit Score: Is it Good or Bad?

A credit score reflects your creditworthiness, serving as a key factor for lenders when evaluating your financial reliability. Typically, a score of 726 demonstrates consistent and responsible credit management. It is usually categorised as a ‘good’ score.

In India, credit scores are primarily calculated by credit bureaus like TransUnion CIBIL. Known as the CIBIL score, it is one of the most widely used credit scores in India. A 726 CIBIL score indicates that you may have been paying your bills on time and keeping your debt levels manageable. While it’s a strong score, there is still room to improve the score for better financial outcomes.

Credit bureaus in India use slightly different scoring models. Thus, the score ranges tend to vary from one bureau to another. So, the score may be categorised differently across credit bureaus. Here’s how a 726 score might be interpreted:

Regardless of the bureau, a 726 score is viewed positively by lenders. However, it’s essential to remember that alongside this score, other factors like your income and employment status tend to influence your eligibility for any form of credit. So, keep a close eye on your score and also be mindful of the other criteria set by lenders and issuers for different loans and credit cards.

A credit score of 726 opens the door to several financial benefits. Here is what you can gain:

Better Loan Options

A good credit score of 726 improves your chances of being approved for various loans, including personal, car, and home loans.

Low Interest Rates

With a good score, you may become eligible for loans with competitive interest rates. This can help reduce the overall cost of borrowing.

High Credit Limit

Lenders are more likely to offer higher credit limits to those with a 726 CIBIL score. This enables you to enjoy greater financial flexibility to manage your expenses.

Premium Financial Products

With a score of 726, you may qualify for credit cards which come with cashback offers, reward points, travel benefits and much more.

Reduced Financial Risk

Insurance providers often take your credit score into account when determining the premiums for a policy. A 726 score signals low risk, potentially leading to better rates.

Faster Loan Approvals

A high CIBIL score of 726 signifies that you have a good credit history. This speeds up the approval process, as lenders/issuers view you as a trustworthy borrower.

Emergency Credit Access

During financial emergencies, a strong credit score can help you secure quick funding. It enables you to become eligible for options like personal loans, lines of credit, and so on.

Ability to Negotiation 

Your credit score of 726 signifies that you responsibly manage your credit. This gives you a strong foundation for further negotiations. You can ask for better lending terms like reduced fees or longer repayment periods, etc.

A 726 CIBIL score is a good score and can help you access great financial opportunities. However, it is essential to take proactive steps to maintain this score and elevate it to gain access to more borrowing options at better terms. Here are some tips and tricks you can employ to enhance your score:

Pay Your Bills on Time

Set reminders or automate payments to ensure you never miss a due date. On-time payments are vital for maintaining a strong credit score.

Maintain Low Debt Levels 

Aim to keep your credit utilisation below 30% of your total credit limit. Lower utilisation indicates responsible credit use.

Avoid Frequent Credit Applications

Each credit application results in a hard inquiry, which can lower your score. Only apply for credit when necessary.

Monitor Your Credit Report Regularly

Check your credit report for errors or discrepancies. Promptly disputing inaccuracies can help you maintain your score, ensuring that it reflects your credit behaviour accurately.

Diversify Credit Types

Maintaining a mix of different credit accounts like credit cards, business loans, home loans, and more can strengthen your credit profile.

Avoid Closing Old Credit Accounts

Older accounts with a good payment history contribute positively to your credit score. Keep them active to maintain a long credit history.

Pay Off Outstanding Balances

Clear debts systematically to reduce your overall liabilities and improve your debt-to-income (DTI) ratio.

Seek Professional Advice

If you’re unsure how to optimise your credit score, consulting a financial expert can help you get the required guidance.

A 726 credit score is a mark of responsible financial behaviour and positions you for favourable financial opportunities. By making timely payments, maintaining a low credit utilisation ratio, and constant monitoring, ensure that your score remains strong and improves over time.