Good CIBIL Score: Range, Steps, Factors & Benefits for Better Financial Health

Home

Services

Products

Help

Get App

Achieving and maintaining a good CIBIL score is important to financial well-being. Your CIBIL score, ranging from 300 to 900, serves as a major indicator of your creditworthiness. Also, to get a Personal Loan, you must check and understand what a good credit score is in India. This blog will talk about the significance of a good CIBIL score, the steps to get and maintain it, the factors influencing your credit health, and the benefits that come with a favourable credit profile. Whether you are planning to apply for a loan, credit card, or any form of credit, understanding the main factors of a good CIBIL score is essential for getting hold of a secure financial situation.

What is the Range of the CIBIL Score?

Your CIBIL score plays a crucial role in determining your creditworthiness and loan eligibility. Here is the CIBIL score range.

CIBIL Score Range	What it means?
Below 600	A CIBIL score below 600 indicates that urgent action is needed and the approval probability for loans is low.
600-649	In this range, the CIBIL score is considered doubtful, making loan approval difficult.
650-699	Falling within this range suggests satisfactory or fair creditworthiness, with a possible chance of loan approval.
700-749	With a score in this bracket, the creditworthiness is considered good, increasing the chances of loan approval.
750-900	A CIBIL score in the range of 750-900 reflects an excellent credit profile, meaning a very high probability of loan approval.

What is a Good CIBIL Score?

A good CIBIL score range, falling within the range of 700-749, shows a positive credit history and behaviour. For Personal Loans up to ₹40 lakh from Kotak Mahindra Bank, a score of 750 or above is especially advantageous, leading to faster approvals and competitive interest rates, starting at 10.99% p.a. Borrowers maintaining a good CIBIL score enhance their prospects of securing favourable loan terms, resulting in significant time and cost savings.

Easy Steps to See and Figure Out Your CIBIL or Credit Score

Calculating your CIBIL score involves assessing crucial parameters:

Payment History (30%): Evaluate your bill and EMI payment punctuality.
Credit Exposure (25%): Consider the ratio of credit used to the available limit.
Credit Type and Duration (25%): Reflects your experience in managing different types of credit.
Other Factors (20%): Includes credit report inquiries and simultaneous credit lines.

To check your CIBIL score:

Visit the official Credit Information Bureau (India) Limited website.
Click "Get your CIBIL score," log in, and select a subscription plan.
Complete the payment, verify your identity, and instantly generate your CIBIL report. It has your score, credit summary, financial status, and credit history details.

Alternatively, you can also check your CIBIL score instantly through Kotak Mahindra Bank’s website by logging in to your net banking.

Click here https://www.kotak.com/en/personal-banking/loans/free-credit-score-checker.html

Benefits of a Good CIBIL Score

Maintaining a good CIBIL score comes with several advantages for loan applicants:

Higher Approval Chances: The best CIBIL score for a loan is 750 and above. It increases the likelihood of loan approval from Kotak Mahindra Bank.
Low-interest Rates: Good CIBIL scores result in lower interest rates. Kotak offers favourable rates based on your creditworthiness and consistent repayment track record.
Higher Limits: With a good credit score, Kotak Mahindra Bank may extend higher credit card limits or approve larger loan amounts, as it reflects your responsible borrowing behaviour.

Which Factors are Affecting CIBIL Score?

CIBIL score, crucial for Personal Loans, can be influenced by specific actions and behaviours. Key factors include:

Late Payment: A single delayed payment can harm your credit score, reflecting financial mismanagement. Consider debt consolidation to simplify repayments and prevent lapses.
High Credit Utilisation: Consistently exceeding 50% of your credit limit signals financial instability. Keeping expenses within this limit is essential for maintaining a favourable credit score.
Multiple Loans: Seeking multiple loans indicates financial desperation, negatively impacting your creditworthiness. Each lender's inquiry, recorded as a hard inquiry, further reduces your CIBIL score.

Additional Read - Understanding the Impact of GST Rate on Personal Loans: A Comprehensive Guide

Simple Ways to Keep Your Credit Score in Good Shape

Maintaining a healthy credit score range is important for financial well-being. Follow these simple practices to ensure a favourable CIBIL score:

Timely Payments: Pay utility bills, credit dues, and EMIs on time.
Credit Utilisation: Keep your credit utilisation below 30% to demonstrate responsible credit management.
Limit Credit Applications: Avoid applying for multiple credit cards or loans simultaneously.
Diversify Credit Types: Opt for a mix of secured and unsecured loans for varied credit exposure.
Credit Limit Increase: Get your credit limit increase on your credit card by showing responsible usage.
Record Good Practices: Ensure all positive loan practices reflect on your credit report.

Conclusion

Before you apply for a Personal Loan or credit card, you should know how much CIBIL score is good. A good CIBIL score opens doors to financial opportunities and favourable terms. By following the steps to maintain a healthy credit profile and being mindful of the factors impacting your score, you can increase your loan approval chances at lower interest rates and flexible tenures. Following responsible financial habits and regularly monitoring your credit report are key practices for getting and maintaining a good credit score.

Latest Comments

Related Information

Loan Against Securities

Frequently Asked Questions

Why is a good credit score important?

A good credit score is vital because it reflects your financial stability, making lenders more confident in your ability to repay loans. It enhances your chances of loan approval and getting favourable terms, including lower interest rates, ensuring financial flexibility and savings.

How does a good credit score benefit me?

A good credit score offers numerous advantages, such as higher approval chances for loans, lower interest rates, and the potential for increased borrowing limits. It streamlines financial transactions, resulting in quicker approvals and more favourable terms, saving time and money.

What's the impact of a bad credit score?

A bad credit score can significantly hinder your financial prospects. It leads to lower approval chances, higher interest rates, and restricted borrowing limits. It indicates a higher risk of default, making it challenging to secure loans and potentially costing you more in the long run.

How can I improve my credit score?

To improve your credit score, focus on timely payments of bills and EMIs, focus on timely payments of bills and EMIs, maintain a credit utilisation score below 30%, avoid simultaneous credit card applications, diversify your credit portfolio, and minimise hard inquiries. Additionally, practice sound financial habits and reduce risk to enhance reliability.

Can I check my credit score for free?

You can check your credit score for free through the official website of Credit Information Bureau (India) Limited. By visiting their site, clicking on "Get your CIBIL score," and following the provided steps, you can access your credit score, financial status, and credit history details without incurring any charges.

How often should I check my credit score?

Regularly monitoring your credit score is essential for financial awareness. Aim to check your credit score at least twice a year or before significant financial decisions, such as applying for a loan or credit card. Timely checks help you identify and address any discrepancies or issues promptly.

View all

Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.

Good CIBIL Score: Range, Steps, factors & Benefits