Frequently Asked Question

Credit score is a numeric summary derived from

  1. Your repayment history of previous or existing loans and credit cards and
  2. Enquiries performed by credit institutions based on your loan application

Higher the score, the more favourably it is viewed by Financial institutions

There is no standard cut-off for a good score or a loan application; different banks have different barometers.

BALANCE in partnership with Experian Credit Information Service, India’s first and foremost Credit Bureau Services brings to you online and convenient access to your Credit Profile on the app.

Benefits of using the Credit Score service in partnership with Experian:

  1. Best in Class User Interface for our Customers, Clear and transparent profile representation on app
  2. Real time, Completely Online and Securely saved for future reference as long as you maintain the account with us
  3. Loads of features along with the Score to better understand and analyse your Credit profile (Comprehensive view with each loans details)
  4. Helps you to identify and prevent Identity theft / fraud in case some loans are not your obligations or wrongly reported by your Bank/Finance Company

Experian Credit Score is similar to CIBIL Score. Please note, there are 4 Bureau Services in India, like Experian and CIBIL (by TransUnion). Experian and CIBIL are two of the largest bureau services and Experian being the first to be approved by RBI. Most Banks and Finance Companies refer to your Credit Score from two Bureaus which are most like the above ones mentioned.

Generally most Credit score points ranges between 300-900 and the closer it is to 900, the better it is. A higher score increases your chances of getting favourable terms on Loans & Credit cards

Score Rating What it means
NA/NH NIL If you have no credit history, your credit score will be NA (Not Applicable)/NH (No History). This may also be the case, if you have recently taken loans/credit cards as it takes 3-4 months to build your credit score
300 -500 BAD Considered as a Bad credit score. It suggests that you have not been a responsible borrower and have defaulted payments and have unpaid dues. You should address your Loan payment issues immediately as you would most likely be not able to get any new loans and face trouble with respect to past loan history
500-650 AVERAGE A credit score in this range is considered as average. You will need to take measures to improve your credit score. If you have past payment issues, you should address the same immediately.
650-750 GOOD A credit score in this range is considered as good and lenders will consider offering you credit in the form of a loan or a credit card. However, you should still try to improve your Score further upwards. Reason for such score could be either if you have some past defaults or your loan history is not adequate or in the process of getting build up.
750-850 GREAT This is a Great Credit Score, this should give you the additional power to negotiate for better deals on interest rates of Loans/Credit Cards. Keep up the good work!
850+ EXCELLENT Excellent, Very few people achieve this Score which is between 850 to 900. People have long and excellent repayment track record and rarely defaulted on payments are able to achieve this. Helps you get the best Loan/Card deals

Following factors influence your score

  1. Payment history - Whether you’ve paid past credit accounts on time
  2. Amounts owed - The total amount of credit and loans you’re using compared to your total credit limit, also known as your utilization rate
  3. Length of credit history - The length of time you’ve had credit
  4. New credit - How often you apply for and open new accounts
  5. Credit mix - The variety of credit products you have, including credit cards, EMI based loans, Unsecured Loans, Home loans and so on

Pretty much the same things goes in deciding your Credit Score, like

  1. Payment History – as mentioned earlier
  2. Outstanding Debt – that’s the total Loan outstanding as on date
  3. Length of credit history - as mentioned earlier
  4. Monthly Obligations to Income Ratio - That’s the sum total of all your Monthly Instalments (EMIs) and Rental or Home Obligations upon your Net Monthly Salary or Income. If It is around 40%-50%, the same is in a comfortable range, else higher ratio will have a negative impact.

Different Lending institutions have lot of other criteria to look at which undermines there internal policy that differs from one company to another.

Your Credit Score is one of the most important deciding factors when you apply for a Loan or Credit card facility from any financial institution. Balance in partnership with Experian Credit Bureau, India’s leading Credit Information company provides you instant access to your Credit Score and detailed profile of your Borrowings.

If you have a long history of effectively managing credit (taking and paying back loans) and your repayments are on time, then it is likely that you will have a Good credit score and will be more likely to be avail future loans or other credit facilities with favorable terms and rates. If you've never used credit or have negative information on your credit report, like missed payments, you may be less likely to get a loan or credit card. If you do get the loan or credit card, you may get less favourable rates.

Building credit takes time, so it's important to begin building your credit before you really need it.

In case you are new to credit then it is most likely that you may not have a Credit score. Most people when they start their first job or start earning, start thinking of availing outside credit (loans etc). Many a times, your first credit instrument is a Credit Card taken at the time of first job or provided to you by your Bank. In case you do not have any Credit history in past, still you can comfortably build a credit score.

  1. Pay Education Loans diligently. – If you've got a college degree, you probably have at least may have Education loan debt. Student loans are reported to the credit bureaus, so ensure your student loan payment on time every month can help build your credit. Even if you are a Joint lender with your parent, still it should be in your best interest that you repay these obligations on time.
  2. Consumer Loans/Personal Loans/ 2-Wheeler – With advent of Digital loan companies, there are many options of availing instant short term loans. These loans can be used for purchasing a Smart Phone, Consumer goods, or paying your bills etc. Ensure that such loan obligations are paid on time.
  3. Usage of Credit Cards - If you have a credit card and you are using it for various spends and repaying the card bills on time, then you can build your Credit Score. Keep in mind that you do not overdraw your Credit Cards as the same may have negative impact on your Credit Profile.
  4. Home Loans or Other Secured Loans - Loans that are secured against your home, property, gold or vehicle among others also provide you opportunity to build your Credit Score. One common misconception, is on Gold loans. At times, people default and their loan amounts are settled by liquidation of secured assets. Even while at times loans are fully or partly settled, but still these are Loan payment defaults and contribute negatively to your Credit Score and Profile.