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Is high credit score a key to get any kind of loan?

If you think that a high credit score always leads to clearance of any kind of loan, then you are wrong; having high credit scores is not a guarantee that you  will get a loan. The credit providers such as banks and other financial institutions not only look at the credit score of the borrower, but also, look into the credit remarks of the credit report.

Let’s understand both these concepts, i.e. credit remarks and credit score with their respective meanings.

What are Credit Remarks?               

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When you have a different kind of loan accounts, there will be remarks associated for each of these loan accounts. After closing these loan accounts, the remarks could be Settled, Written Off or Closed, out of which the first two are bad remarks. When you are not able to pay the loan amount, the credit providers try to solve the issue at an amount lesser than the loan amount. This leads to remarks such as Settled or Written Off, which indicates that you were unable to pay the full amount of the loan outstanding. This creates a negative impression on future lenders and even after having a good credit score they can reject the loan application.

What is a Credit Score?

A credit score is a number assigned to each individual based on an individual credit report. It depicts the credit worthiness of a person, i.e. how much worthy a person is to avail the loan or credit. A high credit score signifies a good credit history, which means that a person repays the credit on time. It also determines any default in the repayment of loan installments. A low credit score means that there are higher chances of a person defaulting on the loan payments.

Credit Information Bureau India Limited (CIBIL) is the primary credit information company in India. It was founded in the year 2000, for maintaining credit histories of people from the information provided by the credit companies. The credit score calculation involves various factors which are considered by the credit bureau for its calculation.

Credit score for any individual can lie within the range of 300-900. A score of 700 and above is generally considered desirable, but that does not give the surety of getting a loan. Past credit remarks will have a greater impact on their loan evaluation process.

Similarly, if the credit score is less than 700 (around 600 or 650) but credit remarks are clean, there is a probability of still getting the loan.



Credit score gives insights about the future while credit remarks provide past history. The important thing is to ensure that credit report does not contain any bad remarks and even if there are any, necessary actions should be taken to rectify it. The target should not be towards increasing the credit score. The trick is to maintain a clean credit remark and automatically the credit score will increase.

Before applying for any loan, make sure you apply for your credit report and analyze it to determine if any action has to be taken. To sustain over a long term, it is important to pay dues on time and do not misuse credit utilization.