Loans have become an inevitable part of our lives. Be it for personal purposes like education, medical, marriage etc or carrying out business operations, people find themselves in need of urgent cash at various points in time. There are now many lenders who provide loans to borrowers, including individuals. One of the key criteria taken into consideration by lenders in India before approving any loan is the CIBIL™ score, which is a measure of a borrower’s creditworthiness and potential debt repaying capability. 

Can one get a loan with a credit score of 700? 

Most lenders consider a score of 750 and above as an excellent credit score for availing of hassle-free loans.  A credit score of 700 falls in the next category which signifies that lenders consider you a moderate risk category for approving potential loans. 

For instance, if you apply for a credit card and your CIBIL™ score is 700, your application may or may not be approved, depending on the lender’s other eligibility criteria. Let us understand what is the importance of a good CIBIL™ score and how it impacts potential loans getting approved. 

What is the importance of the credit score in loan applications? 

The credit score is generated by the authorised credit bureaus as part of the comprehensive credit report. This credit score is a reflection of a borrower’s past credit information like past loan repayment patterns, defaults, loans taken etc. This information helps lenders evaluate the borrower’s creditworthiness and financial capability while repaying future loans, thus saving them from risky borrowers who might default on their loans.  

The credit score is therefore an important aspect of the lending process in India.  A good credit score assures a lender of a borrower’s creditworthiness and financial discipline. On the other hand, a low credit score makes a lender cautious about your financial capability to repay loans in a timely manner, making you a high-risk category. This could lead to your loan application getting rejected.

What is a good credit score?

A credit score is considered good if it is in the range between 750 – 900 with 900 being the maximum score. Having a high credit score gives the borrower various benefits in the loan terms like higher loan amount, better interest rates, lower EMIs, longer tenure etc. 

A credit score between 550 – 749 is considered an average score implying you carry a certain amount of risk from the lender’s perspective. However, your loan may still get approved if other eligibility conditions are met. A credit score between 300 - 549 is considered a poor score, leading to outright rejection of your loan application.

Disadvantages of applying for a Loan with a Credit Score of 700?

Key disadvantages are 

  • The application might get rejected: There are higher chances of your loan application getting rejected with a credit score of 700 as lenders may consider you a risky category for granting loans. 

  • Lower Loan Amount Sanctioned: Lenders may sanction your loan but you may get a loan approved with a smaller sanctioned amount than originally applied for.

  • High Rate of Interest: Lenders may approve your loan but you may not get better loan terms. They will offer the loans at a higher rate of interest than what you would have with a good credit score. This will increase your financial burden and could also lead to a default on further loan payments. 

  • Higher EMIs: Lenders may grant loans on a credit score of 700 but may demand that you pay higher EMIs which could cause a dent in your finances.

  • Shorter Loan Tenures: Lenders may provide you shorter tenure loans instead of longer tenure loans which will again increase your financial burden.

  • Require Collateral: To safeguard themselves from low credit score borrowers, lenders may grant you a loan provided you pledge some security or collateral towards the loan granted. 

One can improve their credit score over time by following certain financial discipline like regular payment of loans, reducing credit utilisation limit etc. To check your credit score, consider the Credit Mantri website, where you can check the credit score for free.


If one applies for a loan with a credit score of 700, at times the loan may get approved but the borrower may face disadvantages as stated above. This will not only increase their financial burden but also negatively impact their credit score. Therefore, always ensure that your credit score is 750 and above before applying for any loan.  Otherwise, your chances of a loan getting rejected run high. 


1. Will regular payment of existing loans improve my credit score?

Yes, regular payment of existing loans improves your credit score. This will help to get potential loans approved quickly.

2. Why is it important to have a good credit score?

Having a good credit score provides various benefits to the borrower like bigger loan amount, low rate of interest, low EMIs, longer loan tenure etc.

3. Would a credit score of 700 put me in a high-risk category?

A credit score of 700 puts me in the moderate risk category. Lenders may still consider your case risky which might lead to loan rejection. So, having a good credit score is always important. 

4. Does having multiple loans improve my credit score?

Multiple loans have higher chances of reducing your credit score as lenders consider such borrowers as a high-risk appetite borrower, which increases the risk of default. 

5. Does having a good credit score help me gain creditworthiness?

A good credit score assures the lenders of your creditworthiness and future capability to repay loans in a timely manner. This also leads to your loans getting approved easily and in a hassle-free manner. Also, lenders could provide you with better loan terms with a good credit score.