Indeed, having a CIBIL score of more than 700 is good because it shows responsible credit usage. It could mean that you have been doing well in managing your loans and paying off your credit card bills, and it will make it easier for you to qualify for credit. Nevertheless, 705 and 790 scores do not provide you with the same opportunities since lenders evaluate their scores differently. Learning the meaning of your CIBIL score will help you realise where you stand in terms of your credit profile and how to better it.

Key Takeaways

• A CIBIL score of more than 700 indicates proper credit management.
• CIBIL scores above 750 give better loan prospects.
• Repaying debts in time and having low utilisation can increase creditworthiness greatly.
• A CIBIL score alone cannot assure loan sanction.
• Periodic checking of one's own CIBIL score does not reduce it.

CIBIL Score Meaning

A CIBIL score is an indicator that consists of three digits representing your credit history. It is based on the information in your CIBIL credit information report, which includes information about loans, credit card history, and repayment behavior, among others.

The score is between 300 and 900. The closer the score is to 900, the higher the credit history and the higher the probability of having your loan request favorably considered. But your CIBIL score alone cannot ensure that you get the loan, as there are many other considerations that lenders need to take into account.

Is a CIBIL Score Greater Than 700 Good?

A CIBIL score greater than 700 can be said to be a good score, as it indicates that you have been behaving responsibly when using your credit.

But then again, every high CIBIL score cannot mean the same thing. Take, for instance, a case where one has a CIBIL score of 705 as well as a CIBIL score of 790. Both scores are greater than 700 but could still be perceived differently by lenders.

Many applicants would find a score greater than 750 to be better, especially when applying for a housing loan.

CIBIL Score Range and What It Means?

This table summarises the interpretation that varies based on your CIBIL score range:

These ranges are indicative rather than universal lender rules. Different lenders can have different credit policies and eligibility requirements. CIBIL itself states that a score above 700 is generally considered good.

Is a 700 CIBIL Score Good for a Home Loan?

It is not that a CIBIL score of 700 is bad for a home loan, although it may not be the best score to have.

In the case of a home loan, a score of 750 or above would be better. While a person with a 700 score can qualify for the loan, the lender may examine their application in detail, and other factors will assume great importance.

These include:

• Monthly income
• Stability of employment/business
• EMI’s paid
• Debt-to-income ratio
• Amount of loan needed
• Details of the property
• Down payment
• Payment record
• Credit utilisation
• Credit inquiries

Thus, having a CIBIL score of 700 and wanting to apply for a home loan, you should try to improve your score.

What are the Advantages of Maintaining a CIBIL Score Higher than 700?

There are various benefits to having a CIBIL score greater than 700.

1. Higher Possibility of Loan Approval

A good credit score can give a favorable first impression of your credit. Thereafter, the lender will take into account your income, liabilities, and other criteria for making the final decision. As per CIBIL, the higher your credit score, the better your chances of getting your application approved.

2. Possibly Lower Interest Rates

Having a good credit profile can enable borrowers to avail of more favorable terms of lending. However, it must be noted that the interest rates are not decided only by the CIBIL score. The lender can even consider your income, employment profile, loan amount, tenure, and repayment capacity.

3. Easy Credit Application Process

People with a good credit history have an easier credit assessment process since their borrowing pattern shows good financial management practices.

4. Negotiation Leverage

Having a good credit profile is a good negotiating tool that allows you to shop around and negotiate better terms, even though the final offer will be up to the lender.

5. Easy Credit Availability

People with a good credit profile find it easy to access various forms of credit in the future, including personal credit, home credit, and credit card facilities.

What are the factors that influence your CIBIL score?

Some of the most critical aspects of the credit report that impact the CIBIL score include:

• Repayment History: Any delays or missed payments in respect of EMIs and credit card bills can have a detrimental effect on the credit report. Payment of dues on time is a key practice in maintaining a good score.
• Credit Utilisation: Credit utilisation is the percentage of available credit that is used. Frequent use of too much of your credit limit reflects increased dependency on credit, which may impact your score.
• Credit Inquiries: Frequent applications for loans or credit cards will reflect multiple hard inquiries and increased dependency on credit in the credit report.
• Age of Credit History: Having a history of credit for a long time can be beneficial to your credit report.
• Credit Mix: A combination of secured and unsecured loans in appropriate proportions can be a factor in maintaining a good credit report.

Ways to Enhance CIBIL Score From 700 to 750

In case your CIBIL score is somewhere around 700, then there are ways through which you can improve it.

• Pay your EMIs and credit card bills on time: Always remember to make your payments in a timely manner. You may use automatic payments.
• Do not utilise credit excessively: Do not use a huge amount of your credit limit on regular basis.
• Do not apply for loans unnecessarily: Use credit only when you really require it.
• Take care of your old accounts: Good management of your accounts will help you in your overall credit history.
• Check your CIBIL report: Always review your CIBIL report from time to time to see whether any error exists regarding your accounts and payment details.
• Raise disputes if necessary: Raise a dispute against your report if there is any wrong detail.

It is usually a slow process to improve your CIBIL score. Repayment behaviour is better than finding a quick way to increase CIBIL score.

Will Checking Your CIBIL Score Lower It?

Not at all. Checking your own CIBIL score will not lower your CIBIL score.

If you are checking your own CIBIL report, then this will be categorized as a soft inquiry, and it will not affect you in the same way as a hard inquiry made by a lender. In this manner, checking your CIBIL report from time to time could be a reasonable approach.

Is 750 a Better Score Than a 700 CIBIL Score?

Yes. Although both scores show a relatively healthy credit history, 750 puts the borrower in a much better situation compared to a 700 rating, especially for large borrowings like a home loan.

Although 700 is not something to panic about, thinking that your loan application will definitely be denied just because of it, it can be considered a decent start to building a good credit history.

In turn, having 750 does not mean getting approved or the interest rates on it; lenders evaluate applications by their own eligibility criteria, regardless of CIBIL score.

Conclusion

CIBIL scores above 700 are considered to be good. This is an indication that you manage your credit properly. A higher score of 750 or more might give you more borrowing advantages. You can work on getting such high scores by making timely payments, using your credit carefully, not applying for many credits, and checking your credit report often.

FAQs

1. What will be the time taken to update the CIBIL score post-repayment?

It will take some time for the details to be updated on your credit report. The time period can differ according to the time at which the lenders share the information with the credit bureau.

2. Is there any scope for improvement in my CIBIL score if I close a loan?

If the closure of your loan account is successful, then this may have a positive effect on your credit report. However, the outcome is not always guaranteed.

3. If I have a high income, will it mean that I will have a high CIBIL score?

Not necessarily. Your salary does not influence your credit score. Even a person who earns a relatively small income and makes timely repayments will get better scores compared to a highly paid person.

4. Is there any impact of a joint loan on my CIBIL score individually?

The repayment performance on a joint loan can affect the credit performance of all those who are equally responsible for the repayment of the loan. Hence, delay or failure in the repayment process may affect more than one borrower’s credit record.

5. How would a rejected loan application affect my CIBIL score?

While rejection of a loan application by a lender may not directly harm your CIBIL score, multiple rejections may result in numerous credit inquiries that may impact your credit record.

6. Does settlement of my loan impact my ability to borrow in the future?

Settlement of the loan may be considered differently compared to the repayment of a loan based on the terms and conditions decided earlier.

7. Will a change of bank impact my CIBIL score?

Just changing the bank where you keep your money will have no effect on your CIBIL score. This score is mainly linked to your credit cards and your repayment behavior instead of your savings account with the bank.

8. Can an inactive credit card hurt my CIBIL score?

Not necessarily, but when you close an old credit card, it could alter your available credit limit as well as your credit history.

9. Can my CIBIL score be reviewed by my employer?

In general, employers do not review your CIBIL score during their employment procedures. However, there could be specific instances where your employer may perform a financial background check due to relevant policies and regulations.

10. Can CIBIL scores be different from other credit bureaus' scores?

Yes, the credit scores by various credit bureaus could differ since the credit bureaus receive different data and use different methods for rating. Hence, having one score greater than 700 does not guarantee that all credit bureaus have the same score for you.