Whether you are looking for a home loan, gold loan, bike loan, or business loan, a good credit score can make all the difference.
In this article, we will discuss whether 700 is a good credit score and how it impacts the borrower.
CIBIL score ranges from 300 to 900. Any score that falls between 690 to 719 is considered a good credit score.
So, a credit score of 700 is not only good but also creditworthy.
However, is this ideal or the best credit score?
Credit score allows the lender to assess the risk the borrower poses. Most lenders prefer lending to individuals who maintain a credit score of 750 and above and this is more applicable to unsecured loans.
However, a credit score of 700 is eligible for a loan even though it comes with stricter loan terms. Individuals with a 700 credit score may not be able to negotiate for a higher amount or lower interest rates.
To borrow a higher amount or to get better loan terms in the future, borrowers must make an effort to increase their credit score to 750 or higher.
Banks consider applicants with a credit score of 750 and higher as ‘financially responsible’ and approve high-ticket loans for lower interest rates.
Applicants with a credit score of 700 can easily secure credit but at higher interest rates. Furthermore, there is a higher chance of rejection when compared to applicants with higher scores.
Here is how you can improve your credit score and minimize your chances of being rejected.
Your repayment history influences your credit score. Set up an autopay system so you don’t miss any of your EMIs.
Too many credit applications can lower your credit score as lenders conduct a credit check. Put a considerable gap between each credit application to maintain your credit score.
Having a low credit utilization ratio positively impacts your credit score. Aim for 30% of the card’s limit and do not exceed the limit if you wish to increase your score.
It's better for your credit score if you mix revolving credit like credit cards with installment loans, which have fixed payments for a predetermined period.
Applicants with a credit score of 700 are eligible for loans and have a good chance of securing the loan amount they desire. However, you may not get the best interest rates. A score of 700 indicates healthy financial habits and you can easily take the score higher by watching your credit score factors.
Credit score improvement does not have a set of predetermined time. If you have no credit history, it may take 3-6 months of consistently positive credit behavior to raise your score to 700. This period could be further extended to a few years if you currently have a bad credit history.
Each credit bureau employs a different method to determine the credit score. Furthermore, each bureau will have a distinct weighting for each parameter. Hence the credit scores vary. But the difference might not be very significant.
Most lenders consider a credit score of 700 as creditworthy and will extend you a home loan. However, you may be charged a higher interest rate for the loan.
It is impossible to predict how much you might be able to borrow because lenders base their judgments on several factors, apart from your credit score.
Lenders also look into your salary, level of debt, specifics regarding your credit history, and other factors.
No. There is no limit to the number of times you can check your credit score and it does not impact your credit score in any way.
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