How your credit score affects loan approval and interest rates

Your credit score is a three-digit summary of how you've handled credit in the past. For lenders, it's the quickest way to estimate how likely you are to repay on time — and it shapes both whether you're approved and what rate you're offered.

What goes into your score

Credit bureaus in India — such as TransUnion CIBIL, Experian, Equifax and CRIF High Mark — build scores from the information lenders report every month:

• Repayment history — on-time or late EMIs and card payments. This matters most.
• Credit utilisation — how much of your card limits you use. Lower is better.
• Length of history — older, well-managed accounts help.
• Credit mix — a combination of secured (home, car, gold) and unsecured (personal, card) credit.
• Recent enquiries — many applications in a short period suggest credit hunger.

How lenders use the score

Scores range from 300 to 900. Each lender sets its own cut-offs, but as a rough guide:

• 750 and above — strong approval chances and access to the best rates
• 700–749 — most lenders will consider you, sometimes at a slightly higher rate
• 650–699 — fewer options, higher rates or lower amounts
• Below 650 — many unsecured lenders will decline; secured options may still be available

The score isn't the only factor. Lenders also look at your income, existing EMIs, job stability, age and where you live. That's why CredoCash checks each partner's criteria before showing you offers.

Hard vs soft enquiries

Checking your own score is a soft enquiry and never lowers it. When you apply for credit, the lender makes a hard enquiry, which can reduce your score slightly for a while. Applying to many lenders at once multiplies this effect — compare first, then apply selectively.

Habits that improve your score

1. Pay every EMI and card bill in full and on time — set up auto-debit.
2. Keep card utilisation below about 30% of your limit.
3. Don't close your oldest card without a reason; it anchors your credit history.
4. Space out new credit applications.
5. Check your report at least once a year and dispute any errors with the bureau.

Most improvements show up over 6–12 months of consistent behaviour. There are no shortcuts — be wary of anyone who promises to "fix" your score for a fee.