What is a good credit score? Here’s your checklist for a healthy credit score

24 September, 2024 | 12:30 IST

Managing your credit score is crucial for maintaining financial health and accessing a range of financial products. In India, a good credit score is vital for securing loans, credit cards and other credit facilities.

Recent insights reveal a significant trend in credit behaviour —around 119 million Indians had monitored their CIBIL Score as of March 2024, according to the TransUnion CIBIL’s flagship report.

This represents a remarkable 51% year-over-year growth in self-monitoring, with 43.6 million more consumers becoming proactive about their credit status in the fiscal year 2023-24. Notably, Gen Z and Millennials are leading this credit revolution, making up 77% of these self-monitoring individuals.

The report also indicates that 46% of those who regularly checked their CIBIL Score and report improved their credit profiles within six months, compared to 41% of those who did not monitor their credit score. This suggests that proactive credit management is leading to greater exploration of credit products and enhancements in credit scores, enabling individuals to secure lower interest rates, better offers and higher credit limits.

Understanding what constitutes a good credit score and how to improve it could be helpful in availing better credit services.

What is a Credit Score?

Your creditworthiness is represented numerically by your credit score. It reflects your ability to repay borrowed money based on your credit history. In India, credit scores range from 300 to 900. And, a preferred credit score range is something between 750 and 900.

Here is how different credit score ranges are generally interpreted:

The exact credit score range and its meaning may slightly differ based on the credit bureau. In India, there are four credit bureaus: TransUnion CIBIL, Equifax, Experian, and CRIF High Mark.

Credit score impact: How it works

You credit score can be impacted by these factors:

Keep track of your credit cards and loans

Credit score improvement: Here’s how you can do it

Improving your credit score takes time and consistent effort. Here are a few ways in which you can improve your credit score:

ALSO READ: What Affects Your Credit Score & How To Build a Healthy Credit Score

Managing credit score: How to do it

Managing your credit score effectively is easier when you have the right tools and resources. Moneycontrol offers a user-friendly platform where you can check your credit score instantly for free. Tracking your free credit score on its  app and website helps you stay updated and informed about your credit health. Whether you are looking to know your current credit score or make improvements, Moneycontrol provides valuable insights and tools.

Overall, a good credit score is crucial for accessing favourable financial products and opportunities. In India, a score of 750 or above is considered excellent and positions you favourably with lenders. By understanding the factors that impact your credit score and taking proactive steps to manage and improve it, you can enhance your financial health and secure better credit terms.

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Fintech

Stay updated on the latest personal finance trends, with a focus on products like credit cards, credit score, personal loans, fixed deposits, and more