CIBIL Score Range: Know Whether Your CIBIL Score is Good or Bad

Whether you’re applying for a personal loan, home loan, gold loan, or a new credit card, your CIBIL score plays a crucial role in approval. This three-digit number ranging from 300 to 900, provided by the Credit Information Bureau India Limited, reflects your financial health and creditworthiness. A strong credit score, ideally a CIBIL score of 750 or higher, increases your chances of getting approved and may result in better loan terms. Factors such as missed payments, high credit utilisation, late or missed payments, and new credit accounts can negatively impact your CIBIL score. Maintaining good credit, paying bills on time, and keeping credit card balances low helps improve your CIBIL score quickly and ensures healthy credit for future loan applications.

So, if you want to know whether your score lies in the best CIBIL score range or not, read on!

What is a CIBIL Score?

A CIBIL Score (also referred to as a credit score) is a 3-digit number that is calculated on the basis of 5 essential factors. This number lies between the range of 300 to 900, and it is absent (not applicable) for individuals who do not have a credit history at all. Usually, when you apply for a loan or a credit card, the concerned lender will check your CIBIL score (and report) to conclude whether you are a creditworthy person or not. What does this mean? That your credit history and record of your repayments are used to determine whether you will be able to make the repayments on time. You can easily do a CIBIL score range check online free by visiting the official website.

CIBIL Range: Find Out If Your CIBIL Score Is Ideal or Not

Understanding your CIBIL score is crucial for managing your financial health and improving your chances of getting approved for loans. Here’s a breakdown of CIBIL score ranges and what they mean for your personal loan application:

Let us have a look at what each of these credit scores means in detail in the sections below:

• 300–599: Poor Score

A score range from 300 to 599 is considered low. Missed payments, high credit utilisation, or late payments can negatively impact your CIBIL score. Individuals in this range may lower their chances of getting approved for a personal loan or gold loan.

• 600–699: Fair Score

Scores in this range are considered fair, but lenders may still view you as a higher risk. Maintaining a good credit score, paying bills on time, and keeping credit card balances low can help improve your credit rating and increase your personal loan eligibility.

• 700–749: Good Score

A CIBIL score of 750 or slightly lower is generally considered good. With this, you have strong credit, better chances of loan approval, and may enjoy lower interest rates on unsecured loans. Recent credit applications and new credit accounts can temporarily affect your CIBIL score, so monitor carefully.

• 750–900: Excellent Score

A score above 750 is ideal for most lenders. Keeping your CIBIL score healthy ensures personal loan approval, and benefits like higher credit limits. Credit information companies, such as Credit Information Bureau India Limited, track details about your credit history, helping you make informed decisions for future credit applications.

Factors Affecting Your CIBIL Reports: Percentage-Wise

There are 5 different aspects that make up your CIBIL score. These include:

Now that you know which parameters affect the CIBIL score, you must be wondering how to maintain the CIBIL score best range. To understand this, you must first know how these parameters impact the credit score. Let’s discuss:

1. Payment History (35%): Repaying your EMIs and credit card bills in a timely manner is one of the crucial things to do if you want to maintain a high credit score. This is because every loan and credit and their repayment details are submitted by the lenders to the CIBIL and will be reflected in your report.

2. Credit Utilisation Ratio (30%): Secondly, maintaining a low credit utilization ratio is essential if you wish to ensure that your CIBIL score doesn’t experience a drastic fall. But how do you calculate the credit utilization ratio? Here’s a simple formula to help you:

   Credit Utilization Ratio =  (Total Outstanding Balances)/(Total Credit Limit)×100

   This ratio is usually reflected in per cent and should not exceed a value of 30%. What does this mean? That you must use only upto 30% of your total available limit every month. If you use more than this, it creates an image that you are hungry for credit or overdependent on it.

3. Tenure of Credit History (15%): The longer the time for which you have had a credit account, the better your CIBIL score will be. This is because when you have a credit account with a specific bank for years, it means that you are consistently paying off any remaining dues before the deadline.
4. Credit Variety (10%): In order to ensure that your credit score lies in the highest CIBIL range, it is also essential that you have a combination of secured and unsecured loans. This diversity has a 10% stake in your total CIBIL score, so make sure that you have multiple loans and credit cards.
5. Applications and Inquiries (10%): Lastly, if you apply repetitively for loans, a hard inquiry will be triggered. This causes your score to decrease significantly and prevents you from getting loans at good terms or interest rates.

Importance of CIBIL Score Range for Loan Borrowing

Your CIBIL score plays a critical part in the loan borrowing procedure, affecting eligibility, approval, terms, and interest rates.

• Approval of the Loan: When you have a high credit score (specifically higher than 750), the chances of your loan getting approved are also higher. This is because a score in the best CIBIL score range, i.e., 750 to 900, is a sign that you are a responsible borrower who will pay off the dues on time.
• Amount of the Loan: In comparison to people with a lower credit score, those with a higher score are eligible for larger amounts in their loans.
• Interest Rate of the Loan: Individuals with a low CIBIL score also get loans with higher interest rates. On the contrary, if you have a higher score, you will benefit from lower interest rates on loans.
• Terms of the Loan: Again, people with a good credit score can negotiate better terms for their loans. They can request longer periods of repayment so that each installment is lowered.

Hence, for seamless loan borrowing from banks or financial institutions, it is essential that you have a score in the “excellent” CIBIL range.

Tips to Improve Your CIBIL Score

There are many ways you can follow to boost your CIBIL score beyond 700 or even 750. However, you must remember that increasing your CIBIL score is a continuous journey, and if you are not consistent with it, you will end up with a below-average score!

• Always remember to pay your loan EMIs on time and ensure that your account has enough funds on the day of payment.
•  If you forget credit card bill payments, set up auto-pay if possible or set reminders. 
• Try your best to avoid a hard inquiry of your CIBIL report by not applying for credit or loans too often.
• Keep your oldest credit accounts active; closing them will reduce the total length of your credit history. 
• For a good CIBIL score range for loan, make sure to maintain a mix of credits in your account. 
• Keep your credit utilization ratio below a percentage of 30%. 
• Keep an eye on your account information and get it corrected as soon as possible if you notice any irregularities. 
• Always plan your loans beforehand and smartly to avoid frustrations and financial strain in the future.

Conclusion

Knowing the CIBIL range in which your credit score lies is essential if you want to ensure that you get a loan that has favorable terms and reasonable interest rates and is granted to you by the lender without much hassle. No matter which kind of loan or credit card you want to apply for, your credit report will be assessed by the lending institution. Hence, before application, it is essential to know how to check your CIBIL score online and how to improve it if required.

Are you willing to apply for personal loan and expect a seamless process? Then, you must choose Hero FinCorp! We are one of the most trustworthy lenders of loans in the country because we understand that a financial crunch can come in the way of your life at any point in time. So, choose us as your reliable partner for loans today!

Frequently Asked Questions

1. What is the best CIBIL score range?

The CIBIL score best range is between 750 to 900, a range which is considered “excellent” and preferred by lenders. If you are responsible when it comes to credit and loan management and make your repayments on time, you can achieve this score.

2. How to do a CIBIL score range check online free?

To check your CIBIL score online for free, you need to visit the official website of the credit bureau, where you can sign in using your credentials or create a new account. On the next screen, you should fill out your PAN card and other essential details and hit the “Submit” button. You will receive the detailed CIBIL report in your email after this.

3. Why should I check my CIBIL score regularly?

Checking your CIBIL report regularly is essential for spotting errors. These errors significantly impact your CIBIL score, which is why you must get them corrected as soon as possible.

4. What is the CIBIL score range for personal loan?

If you wish to apply for a personal loan, you need to have a credit score of at least 720 to 750. This score will show the lenders that you are a creditworthy individual who will pay off the loan in time. Hence, your loan application will be approved smoothly.

5. Can I have a good CIBIL score if I have only one credit card?

Usually, it is recommended that you ensure a proper balance between the number of secured and unsecured loans in your credit account. Hence, it is fair to say that you can have a “good” score with one credit card, but for an “excellent” CIBIL range score, it is recommended that you have a diverse credit and loan list.

6. What happens if I don’t have a score in the CIBIL score best range?

If your CIBIL score is below 600, you will face difficulties securing a loan or even a credit card for yourself. Even if you get a loan, the interest rates will be very high, and the terms will also not be as favorable as people with high CIBIL scores get. 

7. Can a low-income applicant pass the Credit Appraisal process?

Yes, a low-income applicant can pass credit appraisal if they have a stable job, a strong credit history, and a low debt-to-income ratio.