A credit score is a three-digit number that shows how trustworthy you are as a borrower. In India, the most commonly used credit score is the CIBIL score, which ranges from three hundred to nine hundred. The closer your score is to nine hundred, the better your chances of getting loans and credit cards at low interest rates.
A score above seven fifty is considered excellent. Anything above seven hundred is generally good. If your score is below six fifty, you may face difficulty getting approved for credit.
Credit scores are calculated based on your payment history, credit usage, loan mix, credit age, and the number of recent inquiries. Paying your EMIs and credit card bills on time is the biggest factor. Late payments or defaults can harm your score significantly.
To maintain a good credit score, always pay your bills before the due date. Try not to use more than thirty percent of your credit limit. For example, if your credit card limit is one lakh, try to spend less than thirty thousand.
Avoid applying for too many loans or credit cards at once. Each application results in a hard inquiry, and too many of those can make you look credit-hungry.
Having a mix of credit like one loan and one credit card can help. Also, keep your oldest credit account open, as a longer credit history works in your favor.
It is important to check your credit report at least once a year. Sometimes there are errors that can affect your score. If you find any mistakes, report them immediately and get them corrected.
A good credit score can help you get better interest rates, higher credit limits, and quicker loan approvals. It also improves your chances of renting a home or even landing a job in certain industries.
In 2025, your credit score is more than just a number. It is your financial reputation. Take care of it.
Follow You Finance on Instagram for simple, actionable steps to manage credit the smart way.
