Introduction

A credit score is a three-digit number that represents an individual’s creditworthiness, based on their credit history and financial behavior. It is calculated by credit bureaus using factors such as repayment history, credit utilization, loan types, and duration of credit activity.

Lenders and financial institutions use credit scores to evaluate the risk of lending money or offering credit. A higher score indicates responsible financial behavior and increases the chances of loan approval, better interest rates, and higher credit limits.

Whether you're applying for a credit card, home loan, or personal loan, your credit score plays a critical role in determining your eligibility and terms.

Credit scores typically range from 300 to 900, with scores above 750 considered excellent and most favorable for securing credit.

Benefits of Credit Score

Easier Loan Approvals

Increases your chances of getting approved for credit cards, personal loans, home loans, and auto loans.

Lower Interest Rates

Lenders offer better interest rates to individuals with high credit scores, saving you money over time.

Higher Credit Limits

A good credit score can qualify you for higher credit limits on loans and credit cards.

Stronger Financial Reputation

A good credit score reflects financial responsibility and improves your credibility with lenders and service providers.

What Is CREDIT SCORE, and Why Use It?

Credit score is one of the most essential financial indicators in credit systems to assess an individual’s creditworthiness, and hence, having a good credit score is critical for accessing loans, securing better interest rates, and increasing approval chances for credit-related services.

Steps to Maintain a Healthy Credit Score

Pay Bills on Time

Always pay your credit card bills, EMIs, and other dues before the due date to build a strong repayment history.

Keep Credit Utilization Low

Use less than 30% of your total credit limit to show responsible credit usage and avoid negative impact on your score.

Monitor Your Credit Report

Regularly check your credit report for errors or fraudulent activity and raise disputes if needed to keep your score accurate.

Maintain Long Credit History

Keep old credit accounts open and active—longer credit history improves your credit profile and score over time.

Frequently asked questions?

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What is a credit score?

A credit score is a 3-digit number (typically between 300 and 900) that reflects your creditworthiness based on your borrowing and repayment history.

What is a good credit score?

A score above 750 is considered good and improves your chances of loan approvals and better interest rates.

How is a credit score calculated?

It’s calculated using factors like repayment history, credit utilization, credit mix, credit age, and number of inquiries.

How can I check my credit score?

You can check your credit score online through credit bureaus (like CIBIL, Experian, CRIF, Equifax) or financial service providers.

Does checking my credit score lower it?

No, checking your own credit score is a soft inquiry and does not impact your score.

How often should I check my credit score?

It’s good practice to check your credit score at least once every 3 to 6 months.

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