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What is a Good CIBIL Score?

A CIBIL credit score is a 3-digit representation of an individual’s credit history and creditworthiness. It typically ranges from 300 to 900, and reflects the types of credit lines an individual has obtained, as well as their repayment status.

What is a Good CIBIL Score for Loans?

Different loan types have different minimum expected CIBIL scores. For instance, a home loan is considered to be a secured loan, so a borrower can qualify for one even with a relatively low CIBIL score. Here are the CIBIL scores typically required for the most common types of loans. 

Type of loan

Required CIBIL/Credit Score

Personal loan

720 and above

Home loan

650-749

Business loan 

600-700

Two Wheeler Loan

750 and above

Education loan

750 and above

Car loan

600 and above

 

However, it should be noted that these requirements are not absolute: different lenders may have different criteria and requirements for loan approvals.

What are the Benefits of a Good Credit Score?

 

1. Better access to credit cards and loans

A good credit score reflects your ability to manage your debt and credit. This can boost lenders' confidence, giving you better access to loans and credit cards. 

 

2. Lower interest rates 

Having a good credit score can help you access lower interest rates on loans. 

The interest rate is typically tied to your credit score. A good credit score can help you obtain the best interest rates, thereby lowering your overall credit charges. 

 

3. Quick approvals

A high CIBIL score indicates that you are a financially stable and responsible borrower, which means you have an excellent chance of getting quick approvals for a loan (T&C may apply). 

Typically, lenders look to provide loans to individuals who have stable credit scores. In some cases, a good CIBIL score might also speed up your paperwork and formalities. 

 

4. Save on insurance

A good credit score can help you get better insurance deals. Insurance companies use various methods to determine whether someone is eligible for certain policies based on their level of risk. If they know that someone has paid off all of their dues, they might offer them a lower premium than they otherwise would have. 

 

5. Approval for high credit limits

Generally, your repayment capacity directly affects your credit score and creditworthiness. If you as a borrower have an excellent credit history, lenders may be willing to let you borrow more. In other words, a good credit score can help you access higher credit limits. 

How Can You Maintain a Good Credit Score?

A decent credit score can easily be maintained by following a few simple rules and perhaps mending a few financial habits. Here are some of the main things you can do to maintain a good credit score. 

 

1. Paying your bills on time

 

  • To maintain a good CIBIL score, you should aim to pay your bills on time and in full. Doing so boosts lenders' confidence and indicates to them that you are a responsible borrower.

 

2. Not drawing multiple loans

 

  • Drawing multiple loans can be a red flag for lenders. Doing so might indicate that you are an individual who is incapable of managing credit or is neck-deep in financial troubles. 
  • If you draw multiple loans, the risk to your lenders rises considerably. And in the worst-case scenario, if you fail to repay your loans, your credit score will take a severe dent. So, unless absolutely necessary, avoid drawing multiple loans. 

3. Avoiding late payments

 

  • It is important to avoid late payments to maintain a stable credit score. 
  • Late payments can decrease a lender's confidence in your ability to repay. Also, late payments may attract a considerable amount in penalties (such as credit card late payment fees).

4. Staying below your credit limit

 

  • Your credit limit is determined by several factors, such as the type of loan, your income and debt levels, and more. 
  • Overshooting your credit line or mismanaging your debt can invite serious consequences and tank your credit score. It is best to stay below your credit limit to always have a margin of safety. 

5. Checking errors in credit reports and bills

 

  • Any errors in your credit reports and bills can negatively impact your credit score. Hence, it is paramount that you comb through your credit reports to verify the figures in them and catch any potential errors. 

FAQs on Good CIBIL Score

  • ✔️What is a good credit score in India?

    A CIBIL score above 750 is considered good in India.

  • ✔️How can I get a score of more than 700?

    By repaying your debts on time and avoiding excessive debt, you can maintain a high credit score.

  • ✔️What are the types of ration cards given to people belonging to the state of Kerala?

    In your 20s, anything in the range of 600 and above can be considered a fairly decent credit score.

  • ✔️Is it possible to get a credit score of 850?

    850 is an excellent credit score, and you will need to demonstrate a stellar credit record to attain it.

  • ✔️Is 550 a good CIBIL score?

    According to the CIBIL, a score of 550 may be considered low or poor. It may be difficult to obtain loans in such a situation.

  • ✔️Is 700 a good CIBIL score?

    700-900 is considered a sound CIBIL score. If you have such a score, lenders will probably have confidence in your ability to repay loans.

  • ✔️Is a CIBIL score of 650 good or bad?

    A score of 650 can be considered to be close to desirable. However, whether it is good or bad may depend on the lender's perspective.