January 30, 2023
Swathi v prabhu

What is a good CIBIL score to get a loan?

Credit scores are a reflection of the responsible credit behavior of an individual. Individuals with a good credit score are always preferred by lenders. Today, most lenders use a credit score to determine an individual’s creditworthiness. Besides deciding the eligibility of a prospective borrower, the credit score also determines the amount of loan that an individual is eligible for as well as the interest rates on the loan.

CIBIL score or credit score is an important factor that banks look into when prospective borrowers apply for a loan. Good credit scores represent the economic stability of an individual which in turn make the financial transactions easier.

Let us understand a bit more about CIBIL score in this article

CIBIL score

A CIBIL score is a three digit numerical expression that ranges between 300-900, based on extensive analysis and a detailed examination of a person’s credit failed and history, denoting the credit worthiness of an individual.

A credit score ranging from 750 to 900 is considered an excellent credit score. Banks, NBFCs and other online lenders prefer candidates who have a credit score in this range. If your credit score is in this range, you will be eligible for most credit products. 

CIBIL score range

CIBIL Score: Creditworthiness: Approval probability

<600: Urgent action needed: Low

600-649: Murky and doubtful: Difficult

650-699: Satisfactory or fair: Possible

700-749: Good: Good

750-900: Excellent: Very high

What are the Benefits of a Good Credit Score?

Making timely repayments of loans and credit card bills can fetch you a good credit score. This has numerous benefits. Here, we have listed some of the major benefits of a good credit score:

Low-Interest Rates on All Types of Loans

This is a major benefit when it comes to having a good credit score. Everyone aims to maintain good credit so that loans can be availed at low-interest rates. This can further help in paying off loans faster and reduces a significant amount of financial burden. Even a slight reduction in big-ticket loans such as home loans, loans against property, etc., can save you a lot of money in the long run.

Improved Approval Chances for Loans and Credit Card

Every lender first goes through your credit score and reports as soon as you apply for a loan or credit card. This is called a hard enquiry and it can also impact your credit score. The impact can hurt your credit score in case the application gets rejected. However, with a good credit score, the credit approval chances are higher since lenders will not have a strong reason to reject your application.

Higher credit limits

Your income combined with a good credit score is a key determinant of your loan or credit card approval. These can get you a higher loan amount or higher credit limit on credit cards. Lenders will see your creditworthiness and consider you to be a responsible borrower because of these two factors. If you have a low credit score, you may get a loan or card, but the interest rates may be higher, and the credit limit may be lower.

More Negotiating Power

With a poor credit score, there are more chances of getting a loan at higher interest rates. Repayment of such loans can become burdensome in the future. The applicant will also not have any negotiating power to request a reduction in interest rate. On the contrary, individuals with a good credit score will have higher approval chances on the loan and card applications. They will also have the power to negotiate with lenders for lower interest rates by comparing offers from other lenders.

How Can You Maintain A Good Credit Score?

A good credit score comes with responsible credit behavior. Here are some of the factors which will help you in maintaining a good credit score:

1. Consistent Repayment:

Credit score calculations lay nearly 35% weightage on your payment history. If you want to maintain a good credit score all the time, your repayment record should be 100% positive. For this, you must ensure to never miss a repayment.

2. Low Credit Utilization:

Experts recommend that keeping your credit card utilization ratio below 30% will help you gain a good credit score over time. It indicates that you are not credit hungry. Maxing out credit card limits or defaulting on the bill payments can work against a good credit score. Therefore, use your credit card only when it is essential or for emergencies when you are unable to pay through cash.

3. Credit Diversification:

Lenders often try to verify the diversity of credit exposure you have had. Having a mixture of a variety of credit is a good reflection upon your credit report and helps to maintain a good credit score. Use a credit card; opt for both secured and unsecured loans to attain a healthy mixture of credit.

4. Avoiding Multiple Credit Applications:

At times, you may end up applying for multiple credit cards or loans in the hope of fetching a good option. However, this can work against your credit score. Each time you apply for a credit, a hard enquiry is raised by the lender. Multiple such hard inquiries will impact your credit score negatively. If your credit application gets rejected, lenders will not be comfortable to lend you a credit facility in the future. Hence avoid applying for multiple credit options to maintain a good credit score.


1. What is a good credit score in India?

A credit score of 700 and above is considered a good credit score. Credit scores of 750+ are considered excellent. Individuals with high credit scores are eligible for all kinds of loans and credit cards. Borrowers with a good score can also get better interest rates.

2.Will default from many years ago remain on my credit report?

Yes, it does. A default once made is reported to the credit bureaus who update it on the credit report. It remains on the credit report for up to 8 years.


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