Can I get a loan with a credit score of 650?
It is difficult to get a loan with a credit score of 650. Most banks look for a minimum score of 750 when deciding whether to approve of a loan application. Similarly, if you apply for a credit card with a 650 score, you have a much smaller chance of being approved. Even if you are approved with this score, you might be offered unattractive terms on your card.
What is the range of credit scores in India?
Your credit score is a three digit number between 300-900. It is ideal to have a score of 750 or above to qualify for loans or credit cards. If your score is less than 750, it is advisable to increase your score before applying for a credit card/loan.
What are the disadvantages of applying for a credit card with a credit score of 650?
1. Application might be rejected: Each rejection will cause your credit score to drop further.
2. Higher interest rate: With a low score of 650, lenders will see you as a high-risk customer and will offer higher interest rates to safeguard their money. A higher interest rate can be an unnecessary financial burden and will also increase your chance of defaulting on payments.
3. Lower credit limit: Lenders will see your low score as a reflection of faulty credit behaviour and might be unwilling to offer you a high credit limit.
All these disadvantages above will have a negative and long-term impact on your credit score. Therefore, it is advisable to improve your score to 750 before applying for a credit card/loan. You could contact a professional credit management company, like CreditMantri, to guide you on how to improve your score so that you can have faster and easier access to credit.