What is an Excellent Credit Score in India? A Complete Guide

A credit score is a three-digit number that reflects your creditworthiness. It is a numerical representation of how likely you are to repay borrowed money. Lenders, banks, and financial institutions use this score to assess your financial health before approving loans or credit cards.

In India, credit scores are typically provided by credit bureaus such as CIBIL (Credit Information Bureau India Limited), Experian, and Equifax. These bureaus collect and analyse your financial behaviour, including loan repayments, credit card usage, and other credit-related activities, to calculate your score.

An excellent credit score in India is typically 750 or above. This range signifies that you have a proven track record of responsible financial behaviour, making you a low-risk borrower in the eyes of lenders.

Key benefits of having an excellent credit score:

1. Easier loan approvals: Lenders are more likely to approve your loan applications quickly if you have a high credit score.
2. Lower interest rates: An excellent score makes you eligible for competitive interest rates, reducing your overall borrowing cost.
3. Higher credit limits: Credit card companies and lenders may offer you higher credit limits, providing greater financial flexibility.
4. Access to premium products: Many financial institutions offer exclusive credit cards, loans, or services to individuals with excellent credit scores.
5. Faster approval process: A high score simplifies the loan approval process, as lenders trust your financial stability.

Maintaining an excellent credit score offers numerous advantages, empowering you with financial flexibility and trustworthiness. Here is why it is considered a financial superpower:

1. Enhanced trust with lenders: A high credit score builds confidence with lenders, making you a preferred customer.
2. Favourable borrowing terms: Enjoy benefits like lower EMIs, reduced processing fees, and better repayment options.
3. Financial flexibility: With higher credit limits and access to premium financial products, you can handle emergencies or large expenses with ease.
4. Better negotiation power: Lenders may be open to negotiating terms, such as interest rates or repayment schedules, for individuals with excellent credit scores.

Pro Tip: Bajaj Finserv offers a range of tools and services to help you monitor, improve, and leverage your credit score effectively. Use the Bajaj Finserv app to access your credit score and explore financial products tailored to your needs.

Understanding how your credit score is calculated can help you take the right steps to improve it. Here are the key factors that influence your score:

1. Payment history (35%): Timely repayments of loans and credit card bills have the most significant impact on your credit score.
2. Credit utilisation (30%): The percentage of your available credit that you use also matters. Keeping your utilisation below 30% is ideal.
3. Credit history length (15%): A longer credit history demonstrates stability and responsible financial behaviour.
4. Credit mix (10%): Having a balanced mix of secured (e.g., home loans) and unsecured (e.g., credit cards) credit types positively impacts your score.
5. Fresh credit inquiries (10%): Too many recent credit applications can lower your score, as it indicates potential financial stress.

Building and maintaining a healthy credit score requires consistent effort and smart financial practices. Here are some actionable tips:

1. Pay your EMIs and credit card bills on time: Late payments can significantly lower your credit score. Set reminders or automate payments to avoid delays.
2. Keep your credit utilisation low: Aim to use less than 30% of your credit limit to maintain a healthy score.
3. Avoid frequent loan applications: Multiple credit inquiries can negatively affect your score. Apply for credit only when necessary.
4. Monitor your credit report regularly: Check your credit report for errors or discrepancies and get them rectified immediately.
5. Use Bajaj Finserv’s credit monitoring tools: Bajaj Finserv offers user-friendly tools to help you track and improve your credit score effortlessly.

There are several myths surrounding credit scores that can misguide you. Let us address some of the most common ones:

1. Myth: Checking your credit score will reduce it
   Fact: Checking your own credit score (soft inquiry) does not impact your score. Only hard inquiries by lenders affect it.
2. Myth: Income determines your credit score
   Fact: Your income does not directly influence your credit score. It is based on your credit behaviour, not your earnings.
3. Myth: Closing old credit accounts improves your credit score
   Fact: Closing old accounts can shorten your credit history length, which may negatively impact your score.

If you are new to credit and do not have a credit history, here are some steps you can take to build one:

1. Opt for a secured credit card: A secured credit card against a fixed deposit is a great way to start building credit.
2. Take a small personal loan: A small, manageable loan can help establish your credit history.
3. Maintain basic credit facilities: Use a credit card responsibly and make timely payments to build a positive credit history.

Bajaj Finserv offers a variety of financial products, including secured credit cards and personal loans, to help you establish and grow your credit profile.

Bajaj Finserv makes it easy to track and manage your credit score. Follow these steps to access your credit report:

1. Log in: Visit the Bajaj Finserv app or website and log in using your registered mobile number or OTP authentication.
2. Navigate to the credit score dashboard: Access your credit score details and view your credit report.
3. Utilise management tools: Use the app’s tools to monitor your score, identify areas for improvement, and track your financial health.

Bajaj Finserv also offers dedicated customer support and innovative app-based services to help you stay on top of your credit score.