What are the Different Credit Score Ranges?

What Are The Different Credit Score Ranges?

What is credit score?

The credit score is a three digit number and is a numeric summary of credit history. The credit score is calculated based on the credit related activities like loans and credit cards availed, repayments, credit mix and so on. The credit score ranges from 300 to 900 and is a prime factor in the sanctioning of loans.

The credit score is derived from information submitted by banks that comprises of a list of all payments, details of approved/rejected applications for loans and credit cards, credit card limit and credit utilization ratio and the status of the credit accounts.

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What Are The Different Credit Score Ranges?

Difference between credit score and Good credit score:

Credit score affects your loan application approval and also terms and conditions that banks offer. A good credit score helps qualify for lower interest rates on credit cards and also better terms on your loans. A credit score ranging from 700 to 750 is considered to be a good score, but the bank sometimes conducts an enquiry before sanctioning loans to individuals with this score.

A Credit score that ranges from 750 to 900 is considered to be an excellent score. A person with this score is generally considered by banks for loans and credit cards as there are fewer chances of defaults. A credit score in this range also places you in a better position as you are eligible to get lower rates of interest on your loans.

See Also: Check Credit Score Online

How to get my credit score free from IndianMoney.com?

Get Free Credit Report by visiting IndianMoney. The services are free of cost. Follow the below mentioned steps to get credit score for free:

• Click on 'Get Free Credit Score now'
• Fill in requisite details like Name, email address, gender, Date of birth, address, PAN card number and Mobile Number.
• An OTP will be sent to your registered mobile number.
• Enter the OTP
• click on 'Get my Credit Report'
• You will see credit score and credit account summary.

What is a good credit score range?

The credit score generally ranges from 300-900. The closer your credit score is to 900, the stronger the credit profile. Given below are the credit score ranges that are considered good by lending institutions:

• 700-750: A credit score is this range is considered as a good score and lenders will consider giving you credit in the form of loans or credit cards. However, the banks make a thorough enquiry before sanctioning loans to individuals with this credit score.
• 750-900: A credit score in this range is considered to be an excellent credit score. It shows you have an excellent record of repayments and clearing dues on time.  A credit score in this range helps get loans sanctioned quickly and also better deals on loans.

Credit Score Scale:

It is a chart that denotes the various credit scores and the categories in which they are placed like excellent, good, fair, poor and bad credit. Summarized below is the numerical range of various credit scores:

CATEGORY	RANGE
EXCELLENT	750 AND ABOVE
GOOD	700 TO 750
FAIR	650 TO 699
POOR	550 TO 649
BAD	550 AND BELOW

How to improve credit score?

Given below are some simple steps that help improve and maintain a good credit score:

• Make payments on time: This is one of the most important factors in determining credit score of an individual. If a person has a long history of repaying loans and credit card dues on time, then the person would have a high credit score. Late payments of dues or loan defaults can bring down the credit score. To boost your credit score, make sure to pay all your bills on time.
• Maintain a good Credit utilization ratio: Credit utilization ratio is a key factor in determining credit score. Generally, a good credit utilization ratio, CUR, is less than 30%. To improve credit utilization ratio, pay more than the minimum amount each month. Always try to maintain a credit utilization ratio of 10% to get a good credit score.
• Credit Mix: This is the percentage of secured vs unsecured loans. More unsecured loans are bad for credit score.
• Don’t be credit hungry: more loans will deeply impact monthly budget. Applying for more credit cards raises the chances of loans getting rejected. Hard enquiries in which banks check credit score, negatively impacts your credit score.
• Keep track of your credit score: Make sure to review your credit score and keep track of it. Get errors in credit report rectified. This will help maintain a good credit score.

See Also: Why You Need To Check Your Credit Report?

What is credit report?

A credit report contains the summary of loans and credit cards availed. Financial institutions like banks and NBFCs look at credit report to determine credit worthiness and take effective lending decisions. Credit reports are important and contain detailed information on loans and credit cards, late payments (if any), bankruptcies and track record of repayments. It contains personal information, contact information, employment information, accounts information, enquiry information and so on. Lenders believe credit report to be important for sanctioning loans.

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