Credit score is a number that represents your creditworthiness for new credit. It is based on your history with credit, and lenders rely on it.
When your credit score is high, there are better chances of you getting approval for new credit. Thankfully, you can now initiate a free CIBIL score check online, and see where you fall on the CIBIL score range within seconds.
To better understand what a ‘good’ credit score is and how you can conduct a free CIBIL score check online, read on.
What is a Good Credit Score?
Your credit score is based on your history with loans and other credit obligations. A good credit score is key to easily accessing credit products. And so, a credit score ranging from 650 to 749 is considered good, increasing your chances of credit approval. However, you may not be eligible for the best interest rates available.
Your best chances are if you have a credit score of 750 or higher. Such scores are deemed suitable and are a sign of you being a responsible borrower. On the other hand, a score below 750 could make it challenging to get approved for loans and credit cards. This is because the CIBIL score range is between 300 and 900, with 900 being the highest.
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As such, a score in the range of 350 to 549 is considered bad, indicating late payments or default. On the other hand, a score in the range of 550 to 649 is fair, but lenders may still hesitate to offer credit.
For a clearer picture, consider the following table.
| CIBIL Score Range | Description |
|---|---|
| NA/NH | No credit history |
| 350 – 549 | Bad CIBIL score; high risk of default |
| 550 – 649 | Fair CIBIL score; instances of default in the past |
| 650 – 749 | Good CIBIL score; lenders will approve credit applications |
| 750 – 900 | Excellent CIBIL score; lowest risk of default and eligible for specialised offers |
Benefits of a Good Credit Score
Having a good credit score can have a significant impact on your financial health. It can open up opportunities for favourable loan terms and more. Here are some of the key benefits of having a good credit score.
- Lower interest rates on loans: Credit scores determining your creditworthiness and the risk associated with lending to you. With a good score, lenders perceive you as a low-risk borrower and offer you loans with better terms. This leads to long-term savings on interest payments.
- Access to better credit card rewards: Credit card companies offer more attractive rewards to you if you have a good credit score. In fact, you may get special deals, with some waivers on fees too. This is because you are seen as more responsible and less likely to default on payments, making you a more desirable customer for credit card companies.
- Higher credit limits: If you have good credit scores, you qualify for higher credit limits, which can be useful in emergencies or when making larger purchases. Higher credit limits also contribute to a lower credit utilisation ratio, which can further improve your credit score.
- Better chances of approval for rental applications: Your credit score can help you get your dream home. Many landlords and rental agencies use credit scores to determine whether to approve rental applications.
- Easier approval for loans and credit: Having a good credit score can make it easier to get approved for loans, credit cards, and other forms of credit. This can be especially beneficial if you are looking to buy a home, start a business, or finance a large purchase.
How to Check Your Credit Score online
Checking your free CIBIL score online is a simple process that you can complete in just a few steps.
Here’s how you can check your CIBIL score online on the official CIBIL website:
- Step 1: You can visit the official CIBIL website
- Step 2: Once you’re on the CIBIL website, click on ‘Get your CIBIL Score’
- Step 3: Select the subscription plan that suits your needs. CIBIL offers a variety of subscription plans, so you can choose the one that fits your budget
- Step 4: You are needed to provide some basic details to confirm your identity. This includes your name, date of birth, address, and PAN card number.
- Step 5: You will receive your CIBIL score and report in your email inbox. You can then review your report to check for any errors or discrepancies.
By following these simple steps, you can check your free CIBIL score online and gain valuable insights into your creditworthiness. Remember to check your CIBIL score regularly to stay on top of your credit and maintain your financial health.
Factors That Can Affect Your Credit Score
The credit score range is quite cast, and your score is an indicator of your financial health. As such, it is important to know the various factors affecting your credit score. It is important to understand them and take steps to maintain and improve them.
Here are some of the factors that can affect your credit score:
- Payment history: It is an important factor in determining your credit score. When you make late payments or missed payments, they become the reason for low credit scores.
- Credit utilisation: The amount of loan you are using in relation to the total amount available to you is known as the credit utilisation ratio. A high credit utilisation ratio can negatively impact your credit score, while low credit utilisation can positively impact it.
- Length of credit history: Your history with credit is another factor that can impact your credit score. A longer credit history with consistent payments can positively impact your credit score. So, it is well worth it to keep your oldest accounts active, especially if it showcases responsible behaviour.
- Types of credit: A diverse mix of credit types, such as credit cards, loans, and mortgages, can positively impact your credit score, as it indicates that you can manage different types of credit responsibly.
- Credit inquiries: Every time you apply for credit, the lender will conduct a credit inquiry. Successive credit inquiries within a short period of time will negatively impact your credit score.
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Once you understand the CIBIL score range, improving your credit score becomes easier. The process requires diligence and patience, and there are no shortcuts. Work towards a good credit score and adopt a more financially disciplined approach to improve it.
Furthermore, with the information and tools available to you, you can make informed decisions about your finances and work towards achieving your goals.
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