What is a bad credit score?

A bad credit score is generally one that is less than 650. A credit score is a three-digit number in the range of 300-900 that is issued by a credit rating agency. It gives lenders a snapshot idea of your credit-worthiness. A score below 750 often disqualifies you from being granted a loan as it implies that you have bad credit – that is, you do not demonstrate financially responsible behaviour. On the other hand, a good credit score (above 750) signifies that you have a good history of fulfilling your financial obligations. A good score makes you an attractive customer to potential lenders.

Your credit score is calculated after considering every detail of your credit history. Every loan-related transaction is recorded by the financial system and sent to the credit rating agencies. (In India, the four credit rating agencies in operation are CIBIL™, Equifax, Experian and HighMark™). Your credit score reflects your individual payment history about all your loans, both past and present, and across all lending institutions. A low score implies that you have a bad credit record, most often because of a poor repayment history.