Introduction
What Is a Credit Score and Why Is It Important for Loans? A credit score is one of the most important factors lenders check before approving a loan. Many people apply for loans without knowing their credit score, which often leads to rejection or higher interest rates.
In this blog, Sanchi Finance explains what a credit score is, why it matters, and how you can improve it.
What Is a Credit Score?
A credit score is a 3-digit number that shows how well you manage credit.
It is calculated based on:
Loan repayment history
Credit card usage
Number of loans taken
Payment discipline
📌 In India, a credit score usually ranges from 300 to 900.
Why Is Credit Score Important?
A good credit score helps you:
 https://www.hdfc.com/housing-loans/home-loans/what-is-credit-score-in-home-loan
Get faster loan approval
Enjoy lower interest rates
Qualify for higher loan amounts
Build trust with lenders
A low credit score can result in:
Loan rejection
High interest rates
Limited borrowing options
What Is a Good Credit Score?
750 and above: Excellent
700–749: Good
650–699: Average
Below 650: Poor
Aim to maintain a score of 750+ for better financial opportunities
How to Improve Your Credit Score
Here are some simple tips:
Pay EMIs and credit card bills on time
Avoid using full credit card limits
Do not apply for multiple loans at once
Regularly check your credit report
Consistency and discipline are the keys to improvement.
Conclusion
What Is a Credit Score and Why Is It Important for Loans? Your credit score reflects your financial behavior, and maintaining a good score makes borrowing easier, faster, and more affordable.
Sanchi Finance helps you understand your credit profile and guides you towards better financial decisions.