Have you ever wondered why some people get instant personal loan approval while others wait weeks or face rejection? The answer lies in one crucial number and that’s your credit score.
This three-digit number summarises your borrowing behaviour, repayment discipline, and overall financial reliability. For lenders, it’s the first and most important signal of whether you’re a trustworthy borrower.
Let’s explore why your credit score plays such a decisive role in shaping your loan journey and how you can use it to your advantage.
What is a Credit Score and How is it Calculated?
Your credit score (ranging between 300 and 900) reflects your creditworthiness, essentially, how likely you are to repay borrowed money. It’s calculated by credit bureaus like CIBIL using several factors:
- Repayment history (35%) – On-time EMI and credit card payments.
- Credit utilisation ratio (30%) – Using less than 30% of your available credit limit.
- Length of credit history (15%) – Older accounts show reliability.
- Credit mix (10%) – A balance of secured and unsecured loans.
- New credit inquiries (10%) – Too many recent loan applications can lower your score.
A higher score (750+) signals healthy financial habits and earns lender confidence instantly.
Why Lenders Check Your Credit Score Before Sanctioning Loans
Every lender wants to minimise risk. Your credit score helps them predict how likely you are to repay the loan on time.
A strong score means:
- Higher loan approval odds
- Lower interest rates
- Faster disbursals
A low score, on the other hand, can make lenders cautious, leading to smaller loan amounts, higher interest, or even rejection.
Platforms like FatakPay bridge this gap by offering instant personal loans even to those with limited or low credit history, helping them rebuild credibility over time.
How Your Credit Score Affects Loan Amount and Tenure
Your score not only decides if you get a loan but also how much and for how long.
| Credit Score Range | Loan Approval Chances | Interest Rate | Tenure Flexibility |
| 750 – 900 | Excellent | Lowest | Most flexible |
| 650 – 749 | Good | Slightly higher | Moderate |
| 550 – 649 | Fair | High | Limited |
| Below 550 | Poor | Very high or rejected | Minimal |
Borrowers with better scores enjoy smoother approvals and longer tenures, while those with lower scores often face tighter repayment timelines.
Common Reasons for Low Credit Scores
Understanding the cause is the first step to fixing it. Some common culprits include:
- Missed or delayed EMIs and credit card payments.
- High credit utilisation (over 50% of your available limit).
- Too many loan or credit card applications in a short period.
- Defaulting or settling previous loans.
- No established credit history.
Even small habits, like ignoring payment reminders can gradually pull your score down.
How to Improve and Maintain a Healthy Credit Score
If your score has dipped, don’t worry. Here’s how you can steadily improve it:
- Pay EMIs and bills on time.
- Keep your credit utilisation ratio below 30%.
- Avoid frequent loan applications.
- Maintain a balanced credit mix.
- Check your credit report regularly.
For borrowers seeking an instant loan for low CIBIL score, FatakPay provides accessible and transparent loan options while helping you rebuild credit responsibly.
Credit Score Is Your Financial Identity
Your credit score is your financial fingerprint, it tells your story long before you speak to a lender. A good score earns trust, better rates, and faster approvals; a low one limits your choices.
But the best part? You’re in full control. By borrowing smartly and repaying consistently, you can reshape your credit profile and unlock better financial opportunities.
Take Control of Your Credit Journey with FatakPay
Looking for a fast, transparent way to access credit?
✅ Apply for instant personal loans with minimal paperwork.
✅ Get instant loan approval in 5 minutes through the FatakPay app.
✅ Explore options even with a low CIBIL score and start rebuilding your credit today.
Download the FatakPay App to get started and take charge of your financial growth.
FAQs
1. What credit score is ideal for a personal loan?
A score of 750+ is considered excellent for instant personal loan approval.
2. Can I get a loan with a low CIBIL score?
Yes. FatakPay offers instant loans for low CIBIL score users after evaluating multiple financial parameters.
3. How long does it take to improve my credit score?
With consistent repayment and responsible borrowing, noticeable improvements can appear within 3–6 months.
4. Does applying for multiple loans affect my score?
Yes, each new application triggers a “hard inquiry,” which can temporarily reduce your score.
5. How do I check my credit score?
You can check it for free through credit bureaus or via the FatakPay app.
