Why your personal loan may get rejected even with a 750+ CIBIL score

A credit score range of 750 – 775 is considered a good credit score. However, this is not the only factor that will help get loan applications approved. Loan approvals require multiple layers of compliance or else, loans may be rejected despite a strong credit score. Rejection of loan applications can be confusing and frustrating, especially for those with a consistent repayment history. A high score improves your chances for approvals, but it does not eliminate all other checks lenders perform.

In this article, we will understand in detail what a 750+ score represents, why applications get rejected, and how you can improve your chances of loan approval.

What does a 750+ credit score mean?
 

CIBIL (Credit Information Bureau of India) assigns all banking customers a credit score ranging from 300 to 900, where:

• 300–549 indicates poor credit health,
• 550–649 reflects fair but risky behaviour,
• 650–749 shows moderate to good reliability, and
• 750–900 represents strong, consistent repayment capacity.

A 750+ CIBIL score reflects a strong repayment history and responsible credit profile. It signals that you have paid EMIs and credit card dues on time, maintained moderate utilisation, have a healthy credit mix and avoided any major defaults. Most lenders consider a score of 750 or higher a favourable score.

However, lenders evaluate more than just your score. A high score indicates credit discipline, but it does not automatically confirm income stability, debt capacity, or current repayment strength. A lender may still reject the application if other parameters do not align with their compliance.

In short, a 750+ score helps open the door, but the final approval depends on a complete assessment of your financial profile, including income proof, bank statements and even tax payments.

Reasons for loan rejection
 

A high credit score reduces the risk of rejection but does not eliminate it. The following reasons explain why borrowers may face loan rejection despite thinking my credit score is above 750.

1. High debt-to-income ratio (DTI): DTI is a comparison of your income with your debt outgoings. If the majority of your income goes toward EMIs, lenders may perceive the new loan as risky. A strong score does not override an imbalanced DTI. Lenders must feel confident about your current repayment capacity to approve new loan applications.

2. Multiple recent credit inquiries: If you have applied for credit cards or several loans in a short period, lenders may interpret this as dependency on credit. Even with a strong credit score, too many hard inquiries indicate financial uncertainty. It can lead to rejection until your credit activity stabilises.

3. Insufficient or unstable income: Lenders assess current income to see your repayment capacity. An applicant with irregular income, frequent job changes, or a short employment history is considered risky. A high score reflects good repayment on past credit, but current income determines new credit. Therefore, banks may ask for additional documents, such as your income proof for 6 months and your bank statements for further verification.

4. Mismatch in documentation: Discrepancies in ID proof, incomplete or inconsistent income information, or mismatched address records can delay or block approval.

5. Limited credit mix: Borrowers must have a diverse credit mix, including personal loans, credit cards and other types of loans, to demonstrate their ability to manage multiple credit lines at the same time.

6. Existing unsecured loan exposure: A lot of ongoing unsecured loans may lower the lender’s confidence, even if you pay on time. This reflects a higher repayment burden and may cause rejection.

7. Data mismatch between bank statements and declared income: This is critical; if bank transactions do not reflect the stated income, the lender may reject the application. This assessment is independent of your credit score.

How to improve your personal loan approval chances and FIRSTmoney eligibility

Your credit score is just a part of your financial profile. Your entire credit profile has several layers that need to be strong to get easy loan approvals from digital personal loan providers like FIRSTmoney by IDFC FIRST Bank. Listed here are essential factors that also teach you how to increase your credit score:

1. Reduce your debt-to-income ratio: This is crucial, a lower DTI reflects good repayment capacity and responsible credit management. It has a great impact on the lender’s willingness to approve your loans.

2. Avoid multiple loan applications: Multiple hard credit inquiries cause a temporary dip in credit score while showing high credit dependency. Avoid making several inquiries. It is recommended to check the eligibility criteria and use EMI calculator to understand the loan amount, tenure and interest rates before applying.

3. Maintain steady employment: Job stability is viewed positively. Lenders consider the duration, income proof, and your income bracket to determine approval.

4. Ensure all documentations are accurate: Verify that your identity proof, address proof, and employment documents match. Complete and clear documentation speeds up approvals.

5. Keep bank statements healthy: Typically, lenders review 6 months of bank statements to assess spending behaviour, salary credits, and balance maintained in the account.

6. Manage unsecured loan exposure: If you already have multiple loans, consider closing one before applying for a new one. It also helps improve your credit profile.

7. Improve financial visibility: Ensuring consistent income proof, proper documentation and clearly listing all liabilities and deductions can help easily avoid process delays and accelerate approvals.

If you manage to focus on all the abovementioned factors, you can significantly increase your chances of personal loan approval. Once you do, you can consider applying for a loan from FIRSTmoney by IDFC FIRST Bank. 

FIRSTmoney by IDFC First Bank offers personal loans up to ₹10 Lakhs with disbursal in 30 minutes. You simply need to register with your basic details, choose loan preferences, link your bank account and complete the video-KYC process.

Check your loan eligibility and apply instantly with FIRSTmoney
 

If your loan application was declined despite a 750+ CIBIL score, reviewing the other eligibility factors can help you understand the rejection and prepare for a stronger loan application next time.

With FIRSTmoney from IDFC FIRST Bank, you can apply for a personal loan if you have a CIBIL score of 710 and above. Eligible customers can view a personalised loan offer, complete verification online, and access funds within 30 minutes at competitive interest rates starting as low as 9.99% per annum.