Is 700 a Good Credit Score, or Bad? For a personal loan

A credit score plays a highly influential role in securing approval for personal loans from banks, NBFCs, and other lenders. You would be surprised to know that nearly 30% of the borrowers in India face personal loan rejections due to a poor credit score or history.

This raises a question: what is a good credit score, and if I have a 700 credit score, is it good or bad? Let’s find out in this short article.

It should be clear that the better the credit score, the better the chances of getting a loan.  A credit score of 700 is a good score, but is it good enough to get a personal loan? Let’s see the importance of a 700 credit score and how it affects your financial numbers.

Let’s understand the concept of  Credit Score:

You must have seen a number lying in the range of 300 to 900 whenever you have checked your credit profile. It is a credit score. A score of 900 is the highest credit score. The credit score is an indicator of the creditworthiness of an individual, taking into consideration various factors such as credit history, repayment habits, credit utilisation, and other factors. The credit score is used by banks, NBFCs, and other financial institutions to assess the risk associated with an individual while lending money.

Is a 700 Credit Score Good?

Yes, a credit score of 700 is considered good. It is quite close to the upside of 900, which is the best a person can reach. It indicates that you are a reliable borrower to the lenders. Though it is not at the top end of the scale, it implies you have a solid credit history with responsible financial behaviour.

With a score of 700, you will be eligible for most forms of loans, such as a personal loan and credit cards. However, you may not always get the best interest rates.

What happens if I apply for a personal loan with a 700 credit score?

Generally, if you apply for a personal loan with a credit score of 700, most banks will approve it. However, there are certain aspects that you must consider:

1. Interest Rates:

Though your personal loan application will get approved, you may not get the lowest interest rates. To get lower interest rates, you will require a credit score of more than 750.

2. Loan Amount:

You will get a moderate to high loan amount as per your income and overall credit profile. A 700-credit score indicates that you manage credit well, which can be appealing to lenders.

3. Chances of Approval:

You will have decent chances of approval for your personal loan. However, you might encounter some limitations, such as fewer benefits compared to applicants with higher scores.

Can I improve my Credit Score?

Yes, of course you can. While a score of 700 is good, it has huge potential for improvement to get more financial benefits. Here are a few ways of improving and maintaining your credit score:

1. Pay Your Bills on Time:

If you are using a credit card, then you must pay all your credit card bills on time. Payment history impacts your credit score on a major scale.

2. Keep your Credit Utilisation Low:

The amount of credit you are utilising in relation to your entire credit limit is known as credit utilisation. Your score may suffer if you use a lot of credit. Less than 30% of your credit limit should be used.

3. Don’t Open Too Many New Accounts:

Every time you apply for new credit, you lower your score. Hence, apply only when necessary.

4. Maintain Long-Term Accounts:

The duration of your credit history also affects your credit score. It is better if you can keep old credit accounts open and in good financial health.

Key Takeaway: 

Ostensibly, it may seem that a credit score of 700 is not good, but it can give you easy approval for your personal loan without any hassle. At Rupee112, we provide great offerings on personal loans with a score of 700. We offer personal loans without any hassle and with the comfort of your home. Just a few taps on the screen, and you will have funds in your account.

FAQs:

1. What is a good credit score for a personal loan in India?

For a personal loan, the most favourable credit score is 750+. At Rupee112, we also process personal loans with a low credit score to make financial services accessible.

2. Can I get a personal loan with a 650 credit score?

With a credit score of 650, you may or may not be granted a personal loan. Your interest rates will likely be higher even if you are granted a personal loan.

3. How frequently should I check my credit score?

Check your score at least once every three months to monitor improvements and identify problems. The Reserve Bank of India (RBI) has ordered that credit bureaus update credit scores twice a month. Check your credit score twice a month for the most recent revisions.