Credit Score Ranges Explained:What They Mean and Why They Matter

Your credit score is more than just a number. It's a vital financial tool that determines how lenders view your creditworthiness. Whether you're applying through traditional banks or modern loan apps, a strong credit score can significantly impact your loan approval and interest rate.

So if you're planning to use a personal loan calculator to estimate your monthly outflow, understanding your credit score is essential.

What Is a Credit Score?

A three-digit number that represents your credit behaviour is called a credit score. It is derived from your credit history including repayment track record, total debt, credit utilisation, and length of credit history. Credit score ranges in India are between 300 and 900, with 900 being the highest.

Credit Score Ranges in India

The credit score range in India follows a standardized scale that can be categorised as follows:

• 300 to 549 (Poor): This indicates a risky borrower. Most lenders are hesitant to approve loans in this range.
• 550 to 649 (Fair): While slightly better, it still poses a risk. You may get a loan, but at higher interest rates.
• 650 to 749 (Good): Considered an acceptable score. Borrowers are more likely to get loans with reasonable terms.
• 750 to 900 (Excellent): This is the best credit score range. It improves your chances of securing loans quickly with better interest rates.

Why Credit Score Matters

1. Impacts Loan Eligibility: Lenders, like banks andloan apps, use your credit score as a filter to determine your loan eligibility. A high score signals responsible credit behaviour, giving lenders confidence in your repayment capacity.
2. Affects Personal Loan Interest Rate: Borrowers with higher scores often enjoy lower personal loan interest rate options. Lenders see you as low risk and are willing to offer better terms.
3. Faster Loan Disbursals: When applying for instant loans online, a good credit score can expedite the approval process, sometimes allowing for same-day loan disbursement.
4. Better Credit Card and Limit Offers: Credit card issuers also refer to your credit score before assigning a credit limit or special reward offers. A good score can fetch you premium cards with enhanced features.
5. Improves Negotiating Power: If you fall within the good credit score range, you may be able to negotiate more favourable repayment terms, flexible EMIs, or lower processing fees.

Understanding the Credit Score Chart

A credit score chart provides a visual way to understand how your score stacks up:

What Is Considered a Good Credit Score?

A credit score of 750 or more is usually considered good. However, this doesn’t mean scores below 750 are bad. For instance, some lenders may approve loans at scores above 700, depending on income stability, employer type, and existing liabilities.

Tips to Improve Your Credit Score

If your credit score doesn't fall within the good credit score range, there are steps you can take to improve it.

• Make sure you pay your credit card bills and EMIs on time
• Limit your credit card utilisation to 30 percent or less
• Do not apply for too many loans in a short amount of time
• Regularly check your credit report for errors

When to Check Your Credit Score

You should check your credit score when:

• Thinking of making an application for a loan or credit card
• Preparing for a large financial move like buying a house
• Suspecting identity theft or fraud

How Kissht Can Help

Digital lenders like Kissht simplify credit access by using your credit score and other real-time financial data to determine eligibility. So, if you’re browsing loan options through the Kissht platform, a strong score gives you more leverage and faster results.

Conclusion: Know Your Score, Own Your Credit

Understanding the credit score ranges helps you become a smarter borrower. Whether you're comparing loans or thinking of applying for a credit card, your score can unlock better offers, lower interest rates, and more financial flexibility. Take control of your credit health today and make informed decisions.

FAQs

Q1. What is considered a good credit score in India?
Typically, a score of 750 and above is usually considered excellent in India. This range offers the best loan terms and fastest approvals.

Q2. Can I still get a loan with a score under 650?
Yes, but the loan might come with a higher interest rate and stricter terms. Some loan providers specialize in loans for lower credit profiles.

Q3. How often should I check my credit score?
Ideally, check it every three to six months. This helps you track improvements or identify any discrepancies in your credit report.