We all know that our credit or CIBIL score is pretty important for securing a personal or home loan. But, only a few of us knows its true meaning. Moreover, most of us usually get advice for having a good credit score? But, do you know what’s the highest credit score possible in India?
These are some of the inquests which are usually not answered by many websites. However, don’t worry because you’re finally at the right place.
So, if you are looking forward to uncovering more about your credit score, how you should maintain it and what’s the highest credit score possible, then read this article carefully from here.
What is Credit or CIBIL Score?
CIBIL Score, commonly known as “Credit Score”, is a rating that defines your creditworthiness for financial loans. In short terms, you can consider yourself a cricket batsman and your credit score is your batting average.
Now, a high batting average generally shows the consistency of any batsman. In the same way, your high credit score reflects your average rate of borrowing and then repaying a credit amount.
In order to become eligible for any loan, a good credit score is always needed. Likewise, if your credit score is currently poor, then it shows that your records as a borrower aren’t good enough. Due to such low credit scores, many lenders will always hesitate before lending you any amount.
Apart from this, the credit scores are not limited to individuals only as they apply to business organisations as well. So, if your organisation has a poor credit score, then you’ll not be able to convince any investor.
What’s the highest credit score possible in India?
Do you know that your credit score can vary anywhere from 300 to 900? Yes, that’s true, and 900 is the highest CIBIL score possible in India. Although, if we consider it practically, reaching the credit score of 900 is pretty tough.
But don’t worry because a credit score of 750 is usually sufficient enough for any type of financial loan. Conversely, if your credit score or CIBIL score is less than 750, you’ll find it more harder to get any financial help from your bank.
So, we can conclude that maintaining a credit score of 750 is a must as it can serve you a lot in the future. But, how can we keep our credit score good enough? Let’s find out:
Always pay your instalments on time
Paying your instalments on time is one of the thumb rules for maintaining a good CIBIL score. Moreover, it’s indeed one of the easiest and convenient ways to maintain a credit score. All you’ll have to do is keep track of due dates and pay your EMIs on time.
Although, if you have managed to miss a payment somehow, don’t worry as a one or two days delay is understandable. However, if your payment is due for more than 30 days, then it will undoubtedly affect your CIBIL score.
Read Credit Report and understand the risk
Do you know that a credit report includes lots of risk factors as well? Yes, that is true, and you should acknowledge them while evaluating your CIBIL score. Firstly, how do you read a credit report? Don’t worry, as we’ll cover this question later in this article, but for now, let’s have a look at our general risk factors:
- Your Payment history
- Owed Amount Value
- Credit History’s Length
- Types of credit that you’re using
- And, New Credit Value
How to read your CIBIL report or Credit report?
A credit report is quite a comprehensively detailed document that generally includes your entire credit history. Now that we have already mentioned the risk factors, we will learn about other sections.
Also, always remember that it’s pretty important to learn how to read your CIBIL report to check if your credit history is correct or not.
- Account History: It’s a particular section that includes almost every detail related to your credit accounts. From the lender’s name to the date of your last payment, the Account History has all of them included.
- Credit Enquiry: Credit Enquiries is a list that shows when third parties have accessed your credit report in the last two years. But, any bank or financial company sees a small section of your credit report only when you have made a loan application. Hence, the number of visits by banks on your credit report depends only on the number of applications you’ve made in the past.
- Credit Summary: Every credit report has a credit summary section to see all your credit accounts and their current balance.
- Public Records: Lastly, we have the Public Records section, which shows all your financial slip-ups. Moreover, this section also covers your criminal record, bankruptcies, etc. Hence, it’s pretty important to read this section carefully and ask for correction if there’s any mistake.
Can we get a loan with poor credit scores?
We can understand that if you were struggling with a poor CIBIL score before reading this article. But, now you are aware of good credit score’s importance, the highest credit score possible and a few other things too.
So, is it possible to get a loan with poor CIBIL scores? The answer is yes, but it’s not that easy. For instance, financial companies like Bajaj Finserv can help you raise funds quickly, and you’ll have to follow their eligibility criteria.
On the other hand, in case it’s possible, then you can consider proving your financial backings. For instance, you can show different records like Bank Statements, FD Statements, etc., to your bank, and they might eventually sanction your loan.
Lastly, if there’s no hope of getting financial backing, you can try the informal method of asking your friends or family members.
Our Verdict on the highest credit score possible
All in all, we are hopeful that now you understand the credit score’s importance rightly. As we mentioned earlier, 900 is the highest credit score possible, but maintaining a score of 750 will also work. All you’ve to do is follow our mentioned tips, and we’re sure that any financial company will give you a loan easily.
Remember that making too many enquiries can also affect your credit score. So, don’t make unnecessary enquiries and don’t apply for a loan until it’s much needed.
One last pro-tip from our side would be that you should never spend more than 30% of your credit limit. If you keep your overall utilisation rate low, it’ll positively affect your CIBIL score.
We hope that you found this article insightful and you’re looking for some more reads like how to improve your finances, then we have got you covered with that too!