What is a Good Credit Score

There are approximately 51,80,00,000 results available against the question- ‘What is a good credit score?’ The hype is not the number of searches but the ultimate answer to it- ‘ what actually is a good credit score’.

A credit score is one of the reasons behind numerous credit-based opportunities like-

  • Higher approval chances of credit card or loan applications

  • Higher negotiation power

  • Lower rate of interest

  • A great number of deals & discounts

  • A borrower can acquire the desired loan amount

  • More preference is given to a borrower with a good credit score

A good credit score is not only searched to know the possible credit-based opportunities, it is also searched to examine whether one needs to work harder to get approved for a loan/credit or not.

While the above points highlight the importance of a good credit score and the intent behind it, it must be noted that there are some habits that restrict one to earn/retain/regain a good credit score.

What is a Good Credit Score?

A credit score between 750 and 900 is considered excellent. A good credit score helps banks, financial institutions to determine whether to lend a loan to the borrower or not. Contrary to this, a borrower with a low credit score loses numerous credit-based opportunities and benefits.

The table below defines the implication of different credit scores to give an understanding of how a borrower’s credit score health looks like and an idea of whether he/she requires to work harder towards achieving a good credit score or not-

Credit Score

Credit Score Health


  • Poor credit score

  • Portrays irregular payment behaviour

  • Gives an idea about missed/delayed credit payments

  • Highlights higher credit dependency

  • Chances of turning into a defaulter


  • Fair credit score

  • Shows irresponsible credit payment behaviour

  • Shows borrower’s multiple hard inquiry attempts


  • Good credit score

  • Depicts a responsible behaviour towards credit or loan EMIs repayment

  • Eligible for credit and loans

  • Low risk of turning into a defaulter

  • High-interest rate is charged against the loan


  • Excellent credit score

  • Little or no chances of turning into a defaulter

  • Highlights responsible credit repayment behaviour

  • Shows no default payments made

  • Error free credit report

  • Lower rate of interest

  • Higher negotiation power

Factors that Affect the Credit Score

There are a major number of factors that affect the credit score; however, it is the responsibility of a borrower to work continuously to improve it. Listed below are a few factors that affect the credit score, which when left unresolved become a hindrance to the loan or credit card approval process-

  • Poor/bad repayment history

  • Higher use of credit utilization ratio

  • Numerous multiple hard inquiries within a particular period of time

  • Comments/error/issues in the credit report

  • Outstanding balance

  • Multiple partially settled payments

How to Improve Credit Score?

Just like there are multiple factors that impact the credit score negatively, there are multiple ways to improve the credit score too. All that a borrower needs to do is to be strict and responsible with the credit repayment process. Listed below are some of the ways a borrower should follow to retain or regain a good credit score-

  • Make timely credit payments

  • Ensure to use credit utilization ratio judiciously

  • Do not make multiple hard inquiries

  • Maintain the right balance between secured and unsecured loans

  • Resolve errors/issues/comments in the credit report

  • Do not take comments in the credit report casually

  • Avoid partially settled payments

  • Don’t leave outstanding balances

  • Set timely reminders for payments

  • Most importantly, figure out how much credit is required and how much expenses can be managed

These are some of the possible ways through which a borrower can regain and retain a good credit score. Besides, it is advised to go through the credit report thoroughly, preferably, twice a year and check the credit score routinely.

To check credit score, there are numerous ways available online. One such way to do so is to check the credit score on the Paytm mobile application. Paytm allows a borrower to swiftly check his/her credit score within minutes while eliminating the need to add too many details. Here is how you can check your credit score through the Paytm mobile application-

  • Login to the Paytm mobile application

  • Navigate to ‘Loans and Credit Cards’

  • Click on ‘Free Credit Score’

  • Check your credit score for free

Paytm allows borrowers to check their detailed credit score report. The report gives a brief overview of the overall factors that might have impacted the credit score collectively. Additionally, there are also tips to improve credit score.

Why is credit score so important?
The credit score is important because it is considered to be a major deciding factor in the approval of loan applications.
How does an outstanding credit balance impact the credit score?
An outstanding credit balance negatively impacts the credit score as it showcases the borrower’s inability to pay back the credit amount in time.
What is a bad credit score?
Typically, a bad credit score ranges from 300-549.
What is a fair credit score?
A fair credit score usually ranges from 550-649.
What is an excellent credit score?
A credit score that ranges from 750-900 is considered an excellent credit score. An excellent credit score is the representation of a person’s responsible behaviour towards repayment of a loan or credit amount.
How long does it take to improve your credit score?
Sometimes, it takes months or even years to improve your credit score.
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