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Credit Score Reveal About You

What Does Your Credit Score Reveal About You?

Credit Score Reveal About You

Your credit score is much more than just a three-digit number. It provides deep insights into your financial behaviour, specifically your ability to manage debt and reliability in making timely repayments. If there's one thing that lenders consider while contemplating loan approval, it's your credit score which reveals your credit health.

Banks, NBFCs, credit card companies, and other financial institutions rely heavily on this score to gauge your creditworthiness and make lending decisions.

In India, credit scores are provided by credit bureaus like CRIF, CIBIL™, Experian and Equifax. Of these, CIBIL™ is the most widely recognised. It assigns credit scores ranging from 300 to 900 based on your credit history. A lender considers 700 to 900 to be a good range for a credit score.

If you did a credit score check and wondering if a 706 credit score is good enough to get a loan or credit card approval, you need to delve deeper into the subject to know how much is a good credit score. Whether you've got a credit score of 300, a credit score of 561, or a credit score of 786, it is imperative to understand the factors contributing towards a good or average credit score in India.

Let's understand what the different credit score ranges reveal about an individual's financial habits.

Check your credit score today with Shriram Finance to learn more about your eligibility for a personal loan approval and an ideal credit score to avail of a personal loan at competitive interest rates along with understanding to calculate your credit score.

Credit Bureaus assign you a score of 300-900 based on factors like:

  • Timelines in repaying your credit card bills, loan EMIs, and other debts
  • Your credit utilisation  ratio - The proportion of your overall credit that you are presently utilizing.
  • Number of recent credit inquiries and applications made (number of times you apply)
  • Your credit mix - the types of loans and credit cards you have
  • Length of credit history - longer history signals financial maturity (keep copies of previous credit accounts handy)

Credit Score: 300-560 - The Credit Novice

This range in your credit reports indicates that you're just starting your credit journey. Those with scores in this bracket might have no prior credit history. Recent graduates or young earners are likely to fall into this credit score category.

Too many credit inquiries without taking any loans or lacking a stable income source can also lead to such scores. Since lenders perceive this as high risk, your loan and credit card applications will likely be rejected.

Tips to improve your credit score:

  • Take a small personal loan and be diligent with EMI repayments on time to establish a credit history
  • Use your first credit card prudently. Always make the full payment on time and not just the minimum amount due.
  • Avoid unnecessary loan inquiries that indicate you are hungry for credit
  • Build a steady income source and let your credit profile mature

Credit Score: 561-650 - The Credit Ambitious

This range suggests you're new to the world of Credit. Lenders will view your applications as risky, and you may get loans at higher interest rates. Click here to learn how to get a personal loan with a low credit score.

A credit score 561-650 range indicates that you need to take responsible measures to handle your credit effectively.

Reasons could include:

  • Frequent loan rejections due to limited income or multiple inquiries
  • Erratic repayments and a tendency to revolve around credit card debt
  • Lack of financial planning before taking on Credit
  • Job instability preventing you from having a steady income

Tips to improve your credit score:

  • Consolidate existing debts and steadily repay through EMIs
  • Build your credit history by taking secured loans that encourage discipline
  • Plan expenses and repay debts ahead of time to gain lender trust
  • Limit unnecessary loan inquiries that signal credit hunger

Credit Score: 651-749 - The Disciplined Debt Manager

This range signifies you're on the verge of being considered a trustworthy borrower. Lenders will approve your loan and credit applications, albeit with modest credit limits.

A score in this bracket indicates you've built a reasonably long credit history by prudently mixing secured debts like home loans with unsecured ones like credit cards. However, there's still room for enhancing lender confidence.

Tips to improve your credit score:

  • Maintain credit utilisation under 30% by limiting unnecessary purchases
  • Build loan repayment discipline through fixed EMIs
  • Gradually increase your credit limit as income grows
  • Use older credit sources prudently before taking new ones

Credit Score: 750-900 - The Prudent Debt Master

Individuals in this range are seen as low-risk borrowers who've excelled at credit management. Their loan applications get easily approved and can access larger loans at attractive interest rates.

A 750+ credit score signifies that the person has a long credit history, a healthy mix of loans and endorsements, a low debt burden, and have never defaulted or delayed repayments. Lenders are eager to offer pre-approved credit to such borrowers.

How to Improve Your Credit Score?

Here are some proven strategies to adopt to build an impressive credit score systematically:

Start small and grow slowly.

When embarking on your credit journey, start by obtaining a modest loan that you can easily manage and repay. It's advisable to refrain from accumulating debts that surpass 30% of your income. As your credit limits expand, consider pursuing larger loans, but exercise caution and avoid taking on excessive debt hastily. Allow your financial profile and income to steadily increase over time.

Mix loans wisely (Types of Credit)

Having only credit cards can be perceived as risky. Take secured loans with fixed EMIs and credit cards to demonstrate repayment discipline and long-term planning.

Limit credit inquiries

Every application for new credit results in a hard inquiry on your score. Limit such inquiries to essential purchases to avoid signalling credit hunger. Space out applications by a few months.

Monitor your score

Check your credit score every quarter and learn how your credit score is calculated based on the financial behaviour you exhibit. Identify gaps - Have you missed any payments or resolved credit card debt? Take corrective actions immediately to limit the damage. You should also be aware of and understand every information in your credit report.

Use credit cards wisely.

Always paying your credit card bills in full and paying your bills on time to avoid interest charges is the first step towards having a good credit score. Having large outstanding amounts for prolonged periods can negatively impact your score. Focus on having a clean and timely payment history at all times.

The Ambitious Borrower

Ramesh, a 26-year-old software professional, has a credit score of 620. Despite having a decent pay package, his loan or credit card applications are frequently rejected as banks perceive him to be a credit risk.

This is because Ramesh made several credit card and personal loan applications last year without assessing his eligibility beforehand. As a result, he has accumulated too many hard inquiries that signal credit hunger to lenders.

He also tends to roll over his credit card balances as he spends beyond his means frequently. His existing card has been at 95% utilisation for over six months. This financial carelessness is reflected in his credit score.

To improve his credit score, Ramesh must first control his spending habits. He should consolidate all existing debts under a single personal loan and pay them off through disciplined EMIs. Only one credit card with a reasonable limit should be used for discretionary expenses. Ramesh can gradually access larger loans at better rates as his score improves over the next year.

The Moderately Disciplined Financier

Veena is a 32-year-old entrepreneur running a startup. Despite being in business for 3 years, her credit score is 690.

She has availed of business loans in the past by providing property as collateral. However, Veena always made it a point to pay the EMIs on time, leading to a reasonably good credit history.

Her main weakness is over-dependence on credit cards. Being busy with her venture, Veena often uses cards for convenience and fails to pay the bill in full. This has resulted in high revolving credit, which has prevented her score from entering the 'excellent' zone.

Veena can improve her credit score by reducing card dependence and switching to personal loans with fixed EMIs for larger expenses. She must limit card spending to 30% of her total limit to ensure her score enters the 750+ range within a year. This will make her eligible for a lower-interest business loan to fund her company's expansion plans.

The Dependable Finance Whiz

Madhav, aged 40 years, has an impressive credit score of 785. His profile depicts financial maturity gained through years of discipline.

He possesses four credit cards; the oldest account is 15 years old. But Madhav uses these judiciously, keeping revolving Credit under 20% of his total limit.

His credit mix includes home, vehicle, and unsecured loans - all of which have been paid back diligently over the years. He makes it a point to check his credit report quarterly for discrepancies.

Whenever Madhav plans a large purchase, like an overseas vacation, he informs his bank in advance. He ensures he has enough savings to repay the credit card bill in full. This helps him avoid interest charges.

He refrains from applying for unnecessary loans or credit to retain his exceptional score. Being mindful of financial shocks, Madhav maintains a 6-month contingency fund in liquid assets to absorb unforeseen expenses without delaying existing EMI payments.

How To Maintain Your Credit Score

  • Tips to avoid factors hurting your credit score and how to maintain your credit score:
  • Avoid debt binging and borrow only when a major purchase is required
  • Keep credit utilisation moderate despite having higher limits
  • Hold long-standing credit sources like the oldest credit cards
  • Maintain separate savings to ensure timely repayment during emergencies


Your credit score provides a snapshot of your financial habits and discipline when managing debts. By understanding the factors that impact your credit score and what your score range indicates to lenders, you can take steps to build and maintain a robust credit profile systematically. Regularly checking your credit report, limiting unnecessary credit inquiries, paying dues on time, and maintaining prudent credit utilisation are the key factors to achieving scores above 750. This makes you eligible for larger, lower-interest loans from financial institutions.

A high credit score signifies financial maturity gained from years of judicious borrowing and repayment. As your score improves, so does lender confidence in your creditworthiness. Check your credit score for FREE now online through Shriram Finance website to understand where you stand currently. With consistent diligence and responsible credit management, you can enter the league of dependable finance whizzes within a year.

Contemplating what's the ideal credit score to avail of personal loan approval at market-leading interest rates and favourable loan terms? Check your credit score today and see if you're eligible for a personal loan!


What does a credit score tell you about a person?

A credit score provides insights into a person's financial behaviour, especially their propensity to repay debts and utilise credit within limits. Higher scores indicate financial maturity, planning, and judicious use of Credit.

What is a good credit score?

A credit score between 750-900 is considered excellent as it makes you eligible for the most attractive interest rates and loan amounts from lenders. A score above 700 is good, while 600-650 is fair.

How to improve your credit score?

Always pay credit card bills on time, maintain credit utilisation under 30%, have a healthy mix of loans (type of credit), limit unnecessary inquiries, and let your credit history grow with time. Monitor your report regularly and take corrective actions immediately.

How to maintain your credit score?

Use Credit wisely, have long-standing accounts, prepay EMIs whenever possible, maintain contingency funds, avoid unnecessary guarantees, and monitor your score regularly to retain it.

Is 653 a good credit score in India?

653 lies in the fair range, though towards the lower end. A score of 653 means your loan and card applications could get approved, albeit at higher interest rates. To enjoy attractive rates, improving your score above 700 is advisable.

Key Highlights:

  • Your credit score reflects how you manage debts and repay loans/credit cards. Higher scores indicate financial maturity.
  • Timely repayments, prudent credit utilisation, and a mix of loans help build a robust credit score above 750.
  • Regularly monitor your credit report, limit unnecessary inquiries, and take corrective actions to maintain a healthy score.
  • Having a long credit history with a good mix of secured and unsecured debts improves lender confidence in your creditworthiness.
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