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What is a Bad Credit Score?

What is a Poor Credit Score?

The different credit bureaus have different scoring models. However, in general, a credit score below 650 is considered to be either fair or bad. This group is said to have “subprime” credit scores, and lenders will classify them as people who might have a hard time repaying a loan.

Here are what the common credit score ranges look like:

Credit Score


How did you get this score?


“Not Applicable” or “No History”

No credit card usage or loans. Thus, there is no credit history.



Missed payments or defaults on credit card bills or EMIs, poor credit utilisation, or a high number of credit enquiries, Considered a high risk of defaulting on your loans., Applicants may not be approved for credit.



Irregular or late payment of credit card bills/EMIs or multiple credit inquiries, Considered a risk for lenders, Applicants may be approved for some credit, but interest rates and down payments may be higher.



Good repayment behaviour in the past, Considered at a lower risk of defaulting, Applicants may be approved for credit but not get the best rates.


Very Good

Regular credit payments, long credit history, responsible repayment behaviour, Considered a low risk for lenders, Applicants likely to be approved for credit with good deals on loans.



Excellent financial management, regular credit payments, low credit utilisation, and exemplary credit history, Considered very low risk for lenders, Applicants likely to receive the best rates and favourable terms on loans and credit cards.

The good news is that, unlike other bad grades, a bad credit score is not fixed. Knowing what affects your score, and what is keeping it low can help you to make improvements to a few key habits, and over time, your score will improve.

How will a Bad Credit Score affect you?

What factors affect your Credit Score?

As mentioned above, an individual’s is a number between 300-900. These numbers are calculated using a number of factors. Each of these factors has a different weightage on the score, but this weightage will change based on the company calculating the score.

The factors that are taken into account include:


What affects these factors?

Payment History

Timely payments of credit card bills, loans, and EMIs will improve your score, while delayed, missed, or defaulted payments will lower your credit score.

Credit Utilization

The lower the amount of your credit limit that you use, the more it will help your score. Ideally, you should try to spend no more than 30% of your credit limit. If it is higher than this, it will bring your score down.

Credit Duration

The longer you have had your accounts and credit cards, the better for your credit score, as it can show potential lenders that you have consistently had responsible financial behaviour.

Credit Mix

There are two major types of credit: unsecured loans (ex. credit cards and personal loans) and secured loans (ex. auto loans or home loans). It is recommended to have a mix of both.

Credit Enquiries

A higher number of “hard inquiries,” i.e., applying for credit, such as credit cards, loans, etc., especially during a short period of time, can lower your score.

What factors will not affect your Credit Score?

What can reduce your Credit Score?

How to Improve a Bad Credit Score?

What to do if you don’t have a Credit Score?

Frequently Asked Questions