How to Get a 700 Credit Score in 6 Months?

Getting a 700-credit score depends on your current credit score and the measures you take to improve it. While it may seem challenging to build your credit score, it is possible to improve it by being financially disciplined. If you manage to maintain a high credit score, it gives you the option to avail a wide variety of personal loan options at affordable interest rates, giving you more financial freedom. This article explores the measures one can take to get a 700-credit score and its benefits. 

Why Aim for a 700 Credit Score?

A credit score of 700 is considered “good” by most lenders in India. If you have a lower credit score than 700, it is ideal to build your credit score at least to 700, to avail loan at favourable terms. Lenders view the individual as reliable as their credit history indicates a fair credit repayment history. Key factors of having a 700-credit score include: 

More access to credit products: You have access to a wide range of credit products like credit cards, personal loans and mortgages.

Lower interest rates: It is easier to get a loan at a lower interest rate with a flexible repayment structure. 

Better terms on Credit cards: If you want to apply for a credit card, with a 700 credit score you get access to a high credit limit with other rewards & cashback offers. 

Understanding Your Current Credit Score

A credit score is a 3-digit number that ranges between 300 – 900. It is a quick way for lenders to assess the creditworthiness of a borrower by knowing their credit score.  A higher credit score implies financial stability and good credit history. It implies the individual is more likely to repay the loan.  

If we consider CIBIL credit score for reference, the credit scores are categorized as: 

Steps to Achieve a 700 Credit Score in 6 Months?

If you want to achieve a 700-credit score in 6 months, you need to factor in your current credit score and financial situation. Depending on that, it can take anywhere between 12- 24 months to improve your credit score. However, if you have a credit score between 500-600, you can improve this credit score to 700 in 6 months by improving these factors: 

Pay Bills on Time: Make sure you make timely credit card and loan payments to build a good credit repayment history. Lenders check the credit history of an individual, to ensure they repay the loan on time. 

Clear Existing Debt: If you have any existing loan or credit, clear them off to improve your credit score. If you have any outstanding credit balances on your credit card, try to lower your credit utilization ratio. It is ideal to keep the credit utilization ration below 30%. 

Keep Old Credit Accounts Open: Maintain old credit card accounts, to have a long credit repayment history. Having a credit account since a long time, helps with building good credit score 

Maintain a Credit Mix (if possible): It helps build good credit score if one has different types of credit, like mortgage, personal loan, credit card and they manage them effectively. 

These are some of the effective strategies to build a credit score of 700. However, you also need to consider the time required to build a good credit score after any adverse credit event. Below is a table that mentions the credit event and average recovery time: 

Is 700 Considered to Be a Good Credit Score?

A 700 credit score is considered a good credit score by most lenders. It implies a good credit history and financial stability. One is likely to get a loan on favorable terms with this credit score. However, there is still scope for improvement. The higher the credit score, the faster the loan approval. With a high credit score, you also can apply for a high loan amount at affordable interest rates.  

If we consider CIBIL score, it ranges between 300 to 900. A CIBIL score of 700 is considered “good” and lenders are likely to offer loan at favorable terms. Some lenders may offer loans but on certain conditions.  

Like the loan may get approved but :

• One may get approved for a lower amount 
• Get loan at high interest rate, increasing financial load 

• Get loan on shorter tenure. This increases the burden on the borrower. 

• Get loan while pledging any asset as a collateral

Thus, while one may get their loan approved the terms might be slightly stricter. It is advisable to have a high or “excellent” credit score before you apply for a loan, to improve your chances of getting a loan on the best terms. 

What are the Benefits of a 700 Credit Score?  

Having a 700 credit score has the following benefits:  

Favorable Interest Rate: You may get loan at relatively lower interest rates for personal loan, home loan or credit cards. 

Better Loan Options: You have access to a wide range of loan products with beneficial terms and flexible repayment structure. 

Higher Credit Limit: You can get approved for a credit card with a relatively higher credit limit.  

Access to Premium Cards: You also may be eligible to get premium credit cards that offer many benefits like travel perks (airport lounge access), rewards and cashback. 

Quick Loan Approval: With a 700–credit score, it is easier to get loan approved in a short time. This makes it convenient for the individual to apply for a loan and have access to funds.  

More Negotiating Power: A high credit score increases your negotiating power with the lender. You can negotiate for better loan terms with favorable repayment structure if you have a high credit score. 

How Does a 700 Credit Score Help You Applying for a Personal Loan?  

Having a 700 credit score is considered “good” by most lenders and increases your chances of getting a personal loan approved. The key factors that help in applying for a personal loan with a 700 credit score is as follows: 

Improves Loan Approval Rate: If the borrower has a 700 credit score, they are likely to get their loan approved on application. Most lenders are likely to offer loan at this credit score, 

Affordable Interest Rate: As compared to someone with a low credit score, you may get loan approved at a lower interest rate. This makes it easier for you to manage the repayment and you save end up saving a lot on lower interest rate. 

High Loan Amount: One is likely to get approved for a high loan amount with a 700 credit score. 

Quick Loan Processing: Loan application and processing is faster. If you fulfil lender loan eligibility criteria, loan is disbursed quickly as well. 

Conclusion  

Building a 700 credit score is possible with the strategies mentioned in this article. Every individual will have to assess their current credit score and financial history to determine which measures will be needed to improve their credit score. It is possible to improve a low credit score by being financially disciplined and maintaining a good credit history. Ultimately, having a high credit score makes it easy to avail a wide variety of credit at affordable terms.