Credit Scores Demystified: Why They Matter and How to Improve Yours

Fatima Qureshi
Jul 3
2 min read

Your credit score is more powerful than you think. Here's how to use it wisely.

What Is a Credit Score?

A credit score is a 3-digit number (usually between 300–900 in India) that represents your creditworthiness. It shows how well you’ve managed loans and credit cards in the past and how likely you are to repay future debts.

The higher your score, the better your chances of getting loans approved—at lower interest rates.

Score Range	Rating	What It Means
750–900	Excellent	Low-risk borrower
700–749	Good	Eligible, with decent rates
650–699	Fair	May face higher interest
Below 650	Poor	Loan/credit rejection likely

Why Should You Care?

Your credit score affects:

Loan approvals (home, personal, education)
Credit card limits and benefits
Interest rates (low score = more interest)
Job screenings (in some industries)

What Impacts Your Credit Score?

Factor	Weight	What It Means
Payment history	35%	On-time payments matter most
Credit utilization	30%	Don’t use over 30% of your limit
Credit history length	15%	Older accounts boost score
New credit inquiries	10%	Too many = risk red flag
Credit mix	10%	A blend of loans + cards helps

How to Check Your Score (Free in India)

CIBIL: www.cibil.com
Experian: www.experian.in
CRIF High Mark: www.crifhighmark.com

How to Improve Your Credit Score

Pay bills and EMIs on time. Always.
Keep credit card usage <30% of the limit.
Avoid too many new loans/credit applications.
Don’t close old cards unless necessary.
Monitor your credit report for errors and dispute if needed.

Final Thought

Improving your credit score is like building trust—it takes time and consistency. But once you have it, doors open wider, and interest rates fall lower. A good credit score isn’t just a number—it’s a financial superpower.

Reference: