696 CIBIL Score

696 CIBIL Score - Is it good or bad?

A CIBIL Score of 696 falls into the fair category on the credit scoring scale, which generally ranges from 300 to 900. This score indicates that you have a reasonably good credit history but may not be in the top tier of creditworthiness.

Understanding a 696 credit score

A score of 696 reflects a mix of positive and negative credit behaviours. It suggests that you manage your credit responsibly but might have had a few hiccups along the way. This score can influence various financial aspects, such as loan approvals and interest rates.

1. Loan approvals

With a credit score of 696, you are likely to qualify for most types of loans, including personal loans and credit cards. However, the interest rates offered might be higher compared to individuals with higher scores. Lenders will view you as a moderate-risk borrower, which could impact the terms and conditions of your loans.

2. Interest rates

A score in this range may result in slightly elevated interest rates. While you can still obtain credit, you might not get the most favourable terms available. It's important to compare offers and choose financial products that best fit your needs.

3. Financial implications

Overall, a credit score of 696 provides a decent foundation but doesn't reflect the highest level of creditworthiness. It's important to stay vigilant about your credit habits to maintain and improve your financial health.

How to improve your 696 CIBIL Score?

Improving your CIBIL Score is essential because it directly impacts your ability to access credit and secure favourable financial terms. A higher score can lead to lower interest rates on loans and credit cards, reducing your overall borrowing costs.

Review and correct your credit report

Carefully check for any inaccuracies or discrepancies, such as incorrect personal details or outdated account information. Dispute any errors with the credit bureau to ensure your credit report reflects your true financial status.

Pay your bills on time

Set reminders or automate payments for utility bills, credit card bills, and loan repayments. Timely payments demonstrate your reliability and positively impact your credit score.

Reduce outstanding debt

Consider using the debt snowball method, where you pay off smaller debts first, or the avalanche method, where you target debts with the highest interest rates. Lowering your credit utilisation ratio can boost your credit score.

Increase your credit limit

Requesting a higher credit limit on your existing credit cards, without increasing your spending, can improve your credit utilisation ratio. A lower ratio signals to lenders that you manage credit responsibly.

Avoid new credit inquiries

Each new credit inquiry can slightly lower your credit score. Limit the number of credit applications and only apply when necessary. Frequent inquiries can make you appear risky to lenders.

Conclusion

Improving a credit score of 696 requires a strategic approach to financial management. By regularly reviewing your credit report, paying bills on time, reducing outstanding debt, increasing your credit limit responsibly, and minimizing new credit inquiries, you can enhance your credit profile. These steps not only help in boosting your credit score but also contribute to better financial health and increased access to favourable credit terms in the future. Consistency and discipline in managing your credit can lead to significant improvements over time, fostering a more secure financial future.