5 benefits of a 750+ credit score: Better loan approvals, lower interest rates, premium financial products and more

A healthy credit score can make all the difference for aspiring borrowers seeking credit cards, personal loans, or home loans. Lending institutions generally consider a score of over 750 to be excellent. Such a score opens doors to seamless credit approvals in the future.

Therefore, it becomes vital for borrowers to manage their repayments efficiently and ensure that they never miss any personal loan EMIs, home loan EMIs, credit card bills, or other similar credit payments. This highlights the fundamental importance of credit scores.

Atul Monga, CEO and co-founder, BASIC Home Loan, adds to it, saying, “Credit score is one of the most important factors that lenders take into consideration when assessing a borrower's loan eligibility. Generally speaking, a score of 750 and above is considered strong and can offer multiple benefits, be it faster loan approval or access to competitive interest rates.”

He added, “Additionally, it also improves your chances of negotiating better terms with lenders, particularly if you have an existing relationship with them. Borrowers must focus on improving their credit health before applying for a home loan. This includes clearing outstanding dues, settling old debts and maintaining a good credit behaviour. It is also important to review their credit report to make sure it is updated and free of errors.”

Easier loan approvals

A good credit score reduces the perceived risk for financial institutions, often resulting in quicker loan clearance and smoother documentation.

What are benefits of staying above a credit score of 750?

1. Lower interest rates: Borrowers with reputable credit scores, i.e., scores over 750, are generally offered more favourable interest rates on personal loans, credit cards, and home loans. Meanwhile, borrowers with weaker credit profiles and a history of past defaults often struggle to secure lucrative loan offers, as they are considered high-risk borrowers.
2. Higher credit limits: Banks extend larger loan amounts and higher credit limits to individuals with a clean repayment history and a solid credit score. A score of 750 or higher is considered optimal for securing these offers.
3. Faster approvals: If you have a long credit history, no past defaults, and a high credit score, you can expect to receive approval for personal loans, home loans, or credit cards in a shorter timeframe. This is vital in emergencies and when funds are required for medical procedures, surgeries, or other health-related emergencies.
4. Better negotiating power: A healthy credit profile and a high credit score help borrowers to negotiate repayment terms, such as interest rates, total loan amount, and repayment tenures, more confidently, as they have several options to choose from due to strong credit profiles.
5. Access to premium financial products and services: Several banks and NBFCs offer select credit cards, personal loans, and home loan options exclusively to high-scoring customers. This is done to appreciate responsible borrowers.

In conclusion, maintaining a credit score of over 750 is about borrowing eligibility and long-term financial discipline. On-time repayments, clearance of credit card bills, prudent utilisation of credit and regular checks of the credit report are key to sustaining a high credit score. As a rule, one should never borrow more than the required amount as a loan, so that repayment can be efficiently managed.

Furthermore, before borrowing, one must consider the pros and cons of loans. Loans come with several complications, such as high interest costs, the risk of a debt trap, implications for credit scores, collateral risks, and hidden charges. Any new home loans or personal loans should only be applied for after proper due diligence and careful discussion with a certified investment advisor.

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Disclaimer: Mint has a partnership with fintech companies to offer credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article aims to educate readers and raise awareness about the essential needs for credit, including loans, credit cards, and credit scores. Mint does not promote or encourage taking credit, as it comes with risks such as high interest rates and hidden charges. We advise investors to discuss with certified experts before taking any credit.