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Your Credit Score Cheat sheet – Things You Must Know About Credit Score

Clix November 11, 2020

What is a Good Credit Score?

Your Credit score is a 3-digit number representing your creditworthiness. The number is calculated after considering your previous payment history, mix of credit availed in the past, defaulter incidents, missed payments, and more. A score between 750-900 is considered excellent when you’re applying for any credit instrument like personal loan, mortgage loan, housing loan, and so on.

Credit scores are maintained and calculated by three different credit bureaus in India. They are TransUnion CIBIL, Experian, and Equifax. Though the score may vary from each bureau, it is a wise approach to obtain a copy of your credit report from all three agencies and scan carefully for errors.


What are Credit Score Ranges?

As mentioned, credit score is a 3-digit number that ranges from 300 to 900. A score of 300 is considered poor and the closer you get to 900, your chances of getting an approval on your credit application increases. A higher credit score indicates a responsible credit behavior and vice versa. Here’s how lenders perceive credit score ratings in general*:

Poor: 300-579

Fair: 580-669

Good: 670-739

Very Good: 740-799

Excellent: 800-900

*These definitions are based on major credit bureaus and not binding. Different lenders may have a different definition for your score.

Can Credit Score Vary?

Since the credit score in India is calculated by three different credit bureaus each having their own calculation metrics, the score of a same individual with same transactions and history can vary across all bureaus.

Not just that, the idea of a good credit score also varies across lenders. for instance, for a picky vendor that closely scrutinizes every loan application, only a score of 750 and above is what they call good. Whereas, on the other side, a lender that offers personal loan for low credit score can also accommodate a credit score of 680 if other factors are favourable.

However, it is to be considered that for any lender, only a number higher than 650 is believed to be a god credit score.

What Constitutes My Credit Score?

The calculation of your credit score is based on five metrics and interestingly, these are the same factors that affect your credit score both positively and negatively. Here they go:

    • Credit payment history – Payment history has the most massive impact on your credit score. your credit payment history is nothing but the record of whether you’ve been regular with your credit payments in the past. It takes up nearly 35% weightage of your credit score.
      However, it is to be stressed here that a single late payment doesn’t affect your credit score much but a series of such incidents and missed payments can significantly bring down your credit score.
    • Credit utilization ratio – Also known as the amount of debt you owe; this accounts for up to 30% in your credit score calculation. It is calculated by taking into consideration the amount of credit available and the amount of credit used. For instance, if you’ve had a credit card with a credit limit of 1 lakh and you have a balance of 25000, your credit utilization ratio would be 25%.
    • Credit history – Credit history, or the longest age of your credit account, accounts for 15% of you credit score calculation. The age of your longest held credit account and the combined age of all credit accounts held by you are taken into consideration. In case you are thinking about closing your old credit cards, ponder again!
    • Credit account mix – This stands for the type of credit accounts held by you – fixed and revolving and makes up for 10% of your score. Fixed credit accounts include loans where the EMI is fixed and revolving stands for those where the monthly payment varies according to the spending and balance. It is highly recommended to have both such accounts in your credit report to appear as a responsible and experienced borrower.
    • Credit inquiries – Credit inquiries, making up for 10% of the overall score, include both hard and soft ones and they occur when someone checks your credit score. If you check your own credit score, it is termed as a soft inquiry and it doesn’t affect your score much. A hard inquiry is when a lender checks your credit profile to evaluate your credit application. This brings down your credit score by a few points.

What Factors Affect My Credit Score?

Drawing instances from the points above, it is safe to say that keep those five metrics in a good shape and your credit score would never dip. However, there are certain factors that affect your credit score and need to be kept in check. Here they are:

      • Credit report errors
      • High credit utilization ratio
      • Missed credit payments in past
      • Loan defaulter cases
      • Asking for increase on credit limit
      • Not having a credit history

How Do I Boost My Credit Score?

Here are some do’s and don’ts that you can implement to keep your credit score on track:

    • Always pay your dues and credit payments on time, even before the due date.
    • Never ever miss a credit payment.
    • Keep your credit card spending in check to avoid getting an increase in the credit limit.
    • Don’t keep too many loans and credit cards running as too much debt exposure brings the score down.
    • Keep a judicious mix of credit and have both fixed and revolving credit accounts on your profile.
    • Review your credit score regularly (preferably every quarter) to keep things under check and take corrective measures in time.


Now that you’ve learned all about the credit score, it’s time you check your credit score online for free and see what that might earn for you. Know your score to receive a pre-qualified personal loan offer at an attractive ate of interest.

For more information and assistance on the personal loan application process, feel free to write to us at


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