CIBIL Score Ranges: All You Need to Know

Understand and Interpret CIBIL Score Ranges

The score assesses your capacity to meet financial obligations as a person or an entity. In addition, through historical trends of credit use and loan settlement behaviour, the CIBIL score offers necessary insights into your credit history. But a good CIBIL score doesn't mean that the moment you apply, lenders will just part with funds. To assess your capacity to repay, they will look at your financial portfolio and sources of income as well.

Understanding CIBIL score ranges

CIBIL scores can range anywhere between 300 and 900, with 900 denoting maximum creditworthiness. In other words, if your CIBIL score is inching towards 900, then just by arriving at banks and financial institutions’ doorstep, they can roll out the red carpet for you.

• What is an excellent score? (700-900)

This score range places you in the top creditworthiness bracket and, if you approach lenders, they will be generally very optimistic. The score indicates that you have wisely used your credit cards, paid your card fees, repaid loans on time, did not run up huge debt, and are typically a financially responsible person. You are a low default risk in trade parlance. The best rates will be offered to you as well, interest wise.

• What is a good score? (600-700)

You're not in the top tier as well as you will get the loan at a higher rate of interest comparatively. Those with credit scores ranging from 600 to 700 are commonly seen as "subprime borrowers," which means that qualifying for better loan terms could be more difficult to find. This range implies that payment has been delayed or defaulted a number of times in the past. Personal loans can be hard for a bank to approve and hefty interest can be charged by a private financier.

• What is an average score? (500-600)

A little bit of free spending on your money? You may need to focus on the practicality of your finances. Although your credit score might mean that having a loan would be really hard, you should work on improving your CIBIL score. Pay credit card bills on time, repay loans on time, maintain the correct credit mix, and generally avoid activities with lenders or credit agencies that raise red flags.

• What is a bad score (below 500)?

Has your application been rejected? Your loan or credit card application is unlikely to be approved by banks or financial institutions because your past is likely to be riddled with defaults and delayed payments. You're going to have to work hard to increase your ratings. It's going to take time, but not impossible.

Each time an individual applies for a personal loan, a credit check on the financial health of the potential borrower is performed by the bank or lending institution. That is, they are seeking a high credit score from CIBIL. In most cases, a CIBIL score of 750 plus is considered suitable for making use of a personal loan. If you wish to avail a Bajaj Finserv Personal Loan on Finserv MARKETS, your score should preferably be above 700.

It pays to have a good score. A high credit score will get you loans that are better and faster. However, for those individuals who have an immediate need for capital, a low CIBIL score can be terrifying as this can adversely affect their borrowings. All isn't lost, however. With these smart moves, you can build up your credit score.

1. Pay your dues on time.

2. Maintain a healthy credit mix.

3. Apply for new credit within your limit.

4. Review your credit history frequently throughout the year.

5. Build up a good history gradually.