Credit Score: What is a Credit Score? Get all details about Credit Score.

Credit Score: Wondering what a credit score? Don't fret, we've got your back. A credit score is a number that represents your creditworthiness. This article provides detailed information about credit score, how to check your credit score, how to improve your credit score, and what is the impact of different range of credit scores. Read on to know it all!   

Updated: May 18, 2020 10:10 IST

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Monika

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Credit Score: What is a Credit Score? Get all details about Credit Score.

What is a Credit Score?

A credit score is a 3 digit number that represents the creditworthiness of an individual. This number ranges from 300 to 900. Higher the credit score, higher the creditworthiness of an individual. There are 4 credit bureaus or Credit Information Companies (CIC) namely TransUnion, CIBIL, Experian Equifax, and CRIF High Mark based on the credit information held by these companies about individuals.

What is the impact of different range of credit scores?

These scores fall into one of the following grades and impact an individual’s chance of getting a loan approved as well as the interest rate paid on these loans. An individual with a higher score has a higher chance of getting a loan approved, also pays lower interest rates on these loans.

Grade Credit Score Range Impact
Excellent > 750 Quick loan approval and low-interest rates
Good 700 – 749 Good chance of loan approvals
Fair 650 – 699 Low chance of loan approval and high interest on loans 
Poor 500 – 649 No chance of loan approval - need to improve the score
Bad < 550 No chance of loan approval - takes years of effort to improve the score 

How can Credit Score be improved?

  • Paying bills in time – includes credit card and utility bills

  • Using only 30 – 40% of credit limit on credit cards

  • Not applying for too many credit cards

  • Not defaulting on loan obligations, paying them in time, every time!

  • Not applying for too many loans

How can one know their own credit score?

Individuals can obtain their credit scores for free from the CICs for up to 2 times a year. One can look at their scores from these websites, note: one needs to open an account with the CIC, provide personal information and pass verification test.

For Free CIBIL Credit Score: https://www.cibil.com/freecibilscore

For Free Experian Credit Score: https://consumer.experian.in/ECV-OLN/signIn

For Free TransUnion Credit Score: https://membership.tui.transunion.com/tucm/orderStep1_form.page?offer=3BM10246&PLACE_CTA=top_right_search

For Free CRIF Credit Score: https://cir.crifhighmark.com/Inquiry/B2C/B2CFFCRPortal.action

Credit Score - FAQ

1. Is Credit Score important to avail of loan?

Yes, it is extremely important to maintain a good credit score to avail of loan from any financial institution. The institution will provide your loan based on your credit score.