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What is Credit Score?
- A credit score is a 3-digit number that reflects your creditworthiness. Most people know it as the CIBIL score, which ranges from 300 to 900.
- The score is based on your credit behaviour. This includes loan repayments, credit card usage, and past borrowing.
- A higher score shows stronger financial discipline. Knowing what a good credit score is can improve your chances of getting approved for loans and credit cards.
Downloading the Aditya Birla Capital Digital App to easily check credit score online.
Benefits Of Good Credit Score
A good credit score makes it easier to access credit when you need it most. Lenders use this number to judge how responsibly you've handled credit in the past.
Faster Loan Approvals
With a strong CIBIL score, banks and NBFCs are more likely to approve loans and credit cards quickly. You're seen as a lower-risk borrower.
Lower Interest Rates
A healthy score often earns you lower interest rates on personal loans, home loans, and credit cards. This can reduce the overall cost of borrowing significantly.
Higher Credit Limits
Lenders may offer higher credit limits when your score shows responsible credit behaviour. This gives you more financial flexibility when you need it.
Better Loan Terms and Flexibility
A good score can give you access to flexible repayment tenures and pre-approved loan offers with fewer formalities.
Why manage your credit score with ABCD?
Check your credit score instantly with ease
Download the ABCD app on your Smartphone, enter your details and check your credit score easily and instantly.
Improve your credit score with the Score Simulator
ABCD’s Score Simulator shows you how to improve your credit score by taking certain actions with respect to your credit profile
Personalised tips for improving credit score
Get personalised tips based on your financial requirements to manage and improve your credit score.
Understanding credit score Range and Its Impact
| Grade | Excellent | Very Good | Good | Fair | Needs Improvement |
|---|---|---|---|---|---|
| Score Range | 769 – 900 | 721 - 768 | 676 - 720 | 581 - 675 | 300 - 580 |
| Interest Rate on Loans | Low | Low | Average | High | Very High |
| Loan Approval Rate | High | High | Average | Low | Very Low |
| Payment History | Good | Good | Average | Poor | Very Poor |
| Credit Utilization Ratio | Low | Low | Average | High | Very High |
Disclaimer: The above score ranges are based on Equifax guidelines. While all credit bureaus in India use a common range of 300 to 900, your score may vary slightly across bureaus such as CIBIL, Experian, Equifax, and CRIF due to differences in data reporting and calculation methods.
How Is Credit Score Calculated?
Payment History
Your repayment behavior plays the most important role in your score. Paying EMIs and credit card bills on time helps maintain a healthy CIBIL score. Delays or missed payments can lower it significantly.
Credit Utilisation
This measures how much of your available credit limit you're using. High usage can signal financial stress, even if you pay on time. Keeping utilisation low supports a stronger score.
Length of Credit History
A longer credit history shows consistency in handling credit. Older, well-managed accounts can improve your score when lenders view credit history through your report.
Credit Mix
New Credit Applications
How to Get Your Credit Score Instantly?
You can check credit score online in just a few minutes using the ABCD app. The process is simple, secure, and gives you instant access to your credit score online without any paperwork.
Download the ABCD App
Install the ABCD app from the App Store or Google Play Store on your mobile phone.
Log In or Sign Up
Open the app and log in using your registered details, or sign up if you are a new user.
Go to Credit Track
Navigate to the My Track section and select Credit Track to begin.
Enter PAN Details
Provide your PAN and review the basic details shown on the screen.
Fetch Your Credit Score
Click on Fetch My Score to view your credit score online instantly.
Reasons for Low CIBIL Score
Understanding what is a good credit score and knowing the common reasons for a low score are equally important. You must be aware of the below reasons:
Failing to pay EMIs, credit card bills, or other dues on time shows lenders you have trouble managing repayments. Even one late payment can significantly lower your score. Lenders see it as risky behavior.
Using too much of your available credit limit signals heavy reliance on credit. Experts recommend keeping your utilization below 30 per cent to support a healthier score.
Applying for many loans or credit cards in a short period leads to numerous hard enquiries on your report. This suggests high credit demand and can reduce your score when lenders do their checks.
If you fail to repay a loan in full, it's recorded as a default. It stays on your report for years. Defaults severely damage your score and affect future loan approvals.
Having little or no credit history makes it harder for lenders to judge your repayment behaviour. This can result in a lower score during assessments.
Incorrect personal details or wrongly reported accounts can drag down your score. Regularly checking your report and correcting errors helps protect your rating.
Closing older credit cards or accounts reduces your average credit history length. A longer history usually helps improve your score over time.
What Is CIBIL & Credit Bureaus
Credit scores are created and maintained by institutions called credit bureaus or credit information companies. These bureaus collect data from banks and lenders to build your credit history and provide you with a report and score.
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TransUnion CIBIL
TransUnion CIBIL is one of the oldest and most widely used credit bureaus in India. It's especially known for the CIBIL score that many banks check when you apply for loans or credit cards.
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Experian
Experian is another major bureau that gathers credit data and calculates scores. Its scoring models may differ slightly from CIBIL's, so your score might vary across bureaus.
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Equifax
Equifax also provides credit reports and scores that lenders use when assessing credit applications. Banks may look at Equifax scores along with others to build a broader picture of your history.
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CRIF High Mark
CRIF High Mark is the fourth major credit bureau in India. It provides scores and reports just like the others. Each bureau uses its own method to calculate your score, which is why scores may vary slightly.
Factors that affect your credit score
Repayment history
Missed or delayed repayments for existing credit hampers your credit score while a clean history helps in improving it.
Credit utilisation ratio
The ratio indicates the credit utilised vis-a-vis the credit allowed. The lower the ratio, the higher the score and vice-versa
Credit mix
This measures the type of credit you have in your portfolio. A good credit mix yields a high credit score
Credit history
Length of credit affects your credit score. If you have a long credit history, the score would be high.
Credit enquiries
Too many hard enquiries into the credit score, done by lenders, affect the score negatively.
Negative remarks
Your credit score will be badly affected if your credit report shows remarks like loan settlement or bankruptcy.
How Can You Improve Credit Score?
Improving your score takes consistent financial habits over time, especially if you aim for the best CIBIL score. Small changes can gradually strengthen your credit profile and boost your rating.
Pay Bills On Time
Timely repayment of EMIs and credit card bills shows lenders you handle credit responsibly. This is the single most important factor in building a strong CIBIL score.
Keep Credit Utilisation Low
Use only a small portion of your available credit. Ideally below 30 per cent. This shows good credit management and supports a higher score.
Maintain a Good Mix of Credit
A balanced mix of secured loans like home loans and unsecured credit like credit cards helps build a stronger credit profile.
Avoid Too Many Credit Applications
Only apply for new credit when necessary. Multiple applications in a short period can signal risk and lower your score.
Monitor Your Credit Report
Regularly do a credit score check and dispute any errors you find. This ensures your score isn't unfairly affected by mistakes.
Keep Older Accounts Active
Longer credit histories usually contribute positively to your score. So avoid closing old accounts unnecessarily.
Actively Check Your Score
You can also use a free credit rating check occasionally to track your progress. Many platforms also offer a CIBIL score free check that lets you monitor improvements without any cost.
Get your credit score at no cost through
Do you have a good credit score? Find out with the ABCD app’s Credit Track. Check your score online to assess your creditworthiness.
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