When you apply for a home loan or car loan, lenders look at your credit score to judge how safely you handle credit. In India, scores usually range from 300 to 900. A higher score means lower risk for the bank and better offers for you. While each lender has its own policy, most banks and NBFCs use clear score bands in practice.
Good Credit Score Range for Home Loans
- 750 and above: Strong profile. You are more likely to get faster approvals and better interest rates. Many lenders treat this as the comfort zone for prime rates.
- 700 to 749: Usually acceptable. Approval is common if income, FOIR, and employment history are solid. The interest rate may exceed the top band.
- 650 to 699: Possible with conditions. Banks may ask for a higher down payment, a lower loan-to-value ratio, or additional documents. Rates can be higher.
- Below 650: Tough. Lenders may decline or ask for stronger compensating factors, such as a co-applicant with a good credit score, additional collateral, or a larger down payment.
Good Credit Score Range for Car Loans
- 750 and above: Best offers and quick processing.
- 700 to 749: Generally acceptable. You may still get competitive rates.
- 650 to 699: Approval depends on income stability and down payment. Expect higher rates.
- Below 650: Limited options. You may need a higher margin of money or a guarantor.
Score Is Not Everything. What Else Do Banks Check?
Lenders evaluate the whole picture, not just the number. Important checks include:
- FOIR or debt-to-income: Your total EMIs should not exceed the lender’s threshold, often around 40 to 50 percent of net income.
- Repayment history: Any recent delay, write off, or settlement can hurt approval, even if the score is decent.
- Credit mix: A balanced use of secured and unsecured credit looks better than relying solely on credit cards.
- Credit utilisation: Using more than 30 percent of your card limits regularly is a red flag.
- Employment stability: Longer job tenure and stable income help.
- Down payment and LTV: A Higher down payment reduces the lender’s risk and improves your chances.
What If You Are New to Credit
Even with little or no history, you can still build a quick, clean track record. Start with a secured credit card against a fixed deposit, spend small amounts, and pay in full every month. Within a few months, your file becomes visible to lenders. If you are applying soon, consider a co-applicant with a strong profile to improve eligibility.
How to Prepare Your Profile Before You Apply
Give yourself 60 to 90 days to tidy up your file.
- Pay every EMI and card bill on time.
- Bring card utilisation below 30 percent.
- Avoid new loan or card applications for a while.
- Clear small outstanding balances and old dues.
- Check your credit report, fix any errors, and ensure closed loans show zero outstanding.
- Keep older cards active with a tiny monthly spend to preserve account age.
Track your progress through a trusted check credit score platform so you know when you are in the safer zone for approval.
Sample Scenarios for Indian Borrowers
- Amit, salaried in Pune, scored 765: Strong chances for a competitive home loan rate if FOIR is under control. A higher down payment can shave off more basis points.
- Priya, an IT professional in Bengaluru, scored 720: Likely approval for a car loan and a reasonable rate. Keeping card usage under 20 percent for two cycles could push the score closer to 750 before applying for a home loan next quarter.
- Rahul, a freelance designer, scored 685: Possible approval with a larger down payment and stable bank statements. Cleaning up credit card dues and showing three months of on-time payments may improve terms.
Quick Checklist Before You Hit Apply
- Score 750 or higher for best offers
- FOIR within lender comfort
- Clean repayment history for the last 12 months
- Low card utilisation and no fresh enquiries
- Accurate report with closed loans updated
Final Thoughts
For both home and car loans, 750+ is the sweet spot. Scores in the 700-749 band often work when income and documents are substantial. Below 700, you may still get approved with the correct offsets, but rates and conditions can be tighter. Prepare your file, track your report, and apply when your profile looks stable.
Bas itna samajh lo. Score 750 ke aas paas rakhoge to rate better milta hai. Time par payment karo, card usage control mein rakho, aur apply kar do tabhi jab profile ready ho. Approval bhi smooth rahega aur pocket par load bhi kam padega.
