When you apply for a credit card or a loan, lenders look at your CIBIL score, and each check reduces your score. When lenders look at your CIBIL score, they do a hard inquiry, which can lower your score if you are rejected. To avoid this, check your Credit score before applying for loans or credit cards. A CIBIL score soft check is one that has no bearing on your score.
Generally, a Credit score of 825 is considered a Good Credit score. The Credit score of an individual is crucial in evaluating his creditworthiness. A lender, such as a bank or a non-banking finance institution, would evaluate a potential borrower’s Credit score before deciding whether or not to lend to them. The amount of loan sanctioned and the interest rate payable on the loan are both determined by the borrower’s Credit score. Similarly, a lender may reject a loan application if the borrower has a low Credit score.
What is a Good Credit score?
According to the CIBIL website, the closer your credit score is to 900, the more likely your loan application will be approved. A credit score of 750 or more is generally considered to be a good Credit score. As a result, it’s critical to understand how factors like timely and full payment of equated monthly installments (EMIs) and credit card dues impact your credit score.
Based on your experience with other banks in terms of loans, credit cards, EMI payments, and so on, Credit scores simply inform banks whether or not you’re likely to fail on loan payments. A score of 700 or above is considered acceptable, and anything over 750 is likely to work in your favor (considering a range of 300-900).
Generally, the Credit score ranges from 0 to 850, with the scores in between being classified into five categories.
0 to 600: This is considered an extremely poor score so it is most likely that the majority of the banks would not approve a loan application with such a score.
601 to 700: While the score in this range isn’t as bad as the previous one, it’s still not good. Some lenders may not reject an applicant who falls into this category directly but the chances of getting the application approved are very low.
701 to 750: The lenders are often waiting for people within this range to apply for a card. And when they do, they usually give their approval.
751 to 850: Your application for a new credit card is almost certain to be approved if your score lies within this range and you satisfy the basic requirements. Scores in this level indicate that the applicant is very trustworthy and represents little to no risk to the lender.
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So, a Credit score of 825 is to be considered a good score and a loan application with such a score is most likely to be approved.
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A credit score runs from 300 to 900, with any score below 300 indicating poor financial management in the past. Such a score will offer lenders an unfavorable picture of you, implying that you have a history of not repaying loans on time. Lenders may be hesitant to provide you with a new loan if you have not made timely payments on past loans. A score approaching 900, on the other hand, indicates that you can be trusted with money and increases your chances of obtaining new credit. Lenders will be delighted to begin working with you on a new transaction. You can also be able to receive the best interest rates. In the case of a Poor Credit score, there are multiple ways available to improve your cibil score.
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