Credit Score: What are the advantages of being in the safe range of 600 to 700?

Being in the safe range of credit score (600–700) offers several advantages. Without being excellent, this range is typically believed to be fair. It can unlock myriad financial opportunities which are not available to those with poor scores. Here, we list out the key benefits of having a reasonably good score.

Advantages of credit score in the safe range

1. Better access to credit: When your credit score is high, you are more likely to be approved for financial products such as personal loans, credit cards and other financial products as compared to someone with a poor credit score (i.e., lower than 600).

While premium cards or large loans may remain out of reach, some banks could consider your application.

2. Lower rates of interest: You may still not be able to avail the lowest possible interest rate, but you will still be offered better rates than someone in the sub-600 range. For example, a personal loan might be offered at 13–16 per cent instead of 18–24 percent for a poor score.

3. Higher credit limits: When you have a safe score, banks will likely have more confidence in your ability to repay. You are also more likely to get higher limits on your credit card or higher loan amounts, which raises your financial flexibility.

4. Faster loan processing: A safer credit score usually means fewer document checks and quicker processing for loans and cards. Some fintech apps even extend pre-approved loan offers for borrowers in this range.

5. Gateway to a high credit score: If you are in the 600 to 700 range, it is not too hard to build up to an excellent score (above 750) by following a few months of responsible behaviour which includes timely EMI and credit card payments.

6. Higher bargaining power: when someone’s credit score is in the safe range, s/he can negotiate better loan terms such as waiver on fees or tenure of loan with their bank or NBFC.

Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.