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The 900-Credit Score: What it Means and How to Get One

Your credit score is the most important factor affecting your future purchases. This three-digit number indicated your creditworthiness or the likelihood that you’ll repay money you borrow. It is generally considered that a credit score in India ranges from 300 to 900, with 900 being the highest and 300 the lowest, which is considered poor. Banks are less likely to reject a new loan application in this case. The higher your credit score, the more likely it is you’ll be approved for new and better credit.

The Benefits of a 900 Credit Score

So, what exactly do you gain by having a 900-credit score? Is this something you should strive for? Here are two benefits of having a 900-credit score:

• You’re more likely to have your applications approved.

Your credit score is an indication of your creditworthiness. Along with your financial background check, your credit score will be considered by the lenders, whether you’ll repay the money you borrow. With good credit score, lenders see you as less risky to lend loan, increasing the chances that they will approve your credit.

• You’re more likely to qualify for lower interest rates.

Credit score also determines the interest rate on your loans. Having a good credit score will help you to get a loan at lower interest rates and save you thousands of rupees overpaying your loan. You’ll see the biggest impact with larger loans that you repay over a longer period of time, such as mortgages and auto loans.

How to Build and Maintain CIBIL score in India?

The elusive CIBIL score isn’t reserved for people who have a lot of money or special monetary privileges with any bank or credit bureaus. It is available to those who maintain their credit score by paying their outstandings on time and managing their credit properly. Hence, here are a few tips on how to build and maintain CIBIL score in India:

• Pay everything on time

Your payment history is the largest evidence for your Cibil score. The more outstanding payments you make on time, the better your credit report will appear.

• Keep your credit card balance low

It is said that, if you want to maintain a high credit score, one should use the credit card below the limit given. If you want to reach the level of maintaining a good credit score, it is necessary to spend below the limit given to you.

• Let negative information age off your credit report.

It is difficult to get a good credit score, even if you pay your outstanding’s on time without any delays. A single negative action can put down your credit score and will affect your credit reports as well. For this reason, be accurate and check your credit reports regularly to avoid such problems.

How Long Does It Take to Get a Credit Score?

Depending on where you’re starting from, it takes several years to build a good credit score. You need to have a few years of only positive response towards your payment and a good credit report.

Getting a perfect 900 credit score will demand huge financial discipline and above all time and patience. Any score above 750 is a good one and opens a window to loan and credit card offers. To obtain a score higher than 800, you may have to follow the steps given below.

  • Pay your credit card bills and EMIs on time. Even missing a single payment could lower your credit score. Moreover, pay your credit card bill in full amount.
  • Maintain a low credit utilization ratio on your credit card and never exceed your credit limit.
  • Having multiple credits and consistently repaying will help boost your credit score.
  • Length of the credit history is an important aspect that determines your credit score. Longer your credit history, better the credit score.

Is That High Score Worth the Effort?

The good news is that many lenders consider 760 the cutoff for excellent credit. With a credit score above that number, you’ll receive most of the same benefits as someone with a 900-credit score. You’ll just have to work a little harder and wait a little longer if you also want the bragging rights.

Disclaimer

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. City Credit Management LLP is not liable for any decision arising out of the use of this information.

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