A credit score above 750 is generally considered excellent and often associated with easy loan approvals. However, many people are surprised when their loan applications get rejected despite having a strong CIBIL score. This happens because lenders evaluate much more than just your score. Your overall financial behaviour plays a crucial role.
Let’s break down the lesser-known reasons why this happens — and how you can fix them.
1. Too Much Existing Debt
Even if your credit score is high, lenders check how much of your monthly income already goes toward EMIs. If a large portion of your salary is tied up in existing loans or credit card payments, banks may feel that adding another loan could strain your finances.
What you can do:
Try to close small loans, prepay part of your EMIs, or reduce credit card dues before applying again.
2. High Credit Card Usage
Using most of your available credit limit can be seen as risky behaviour. While you may pay bills on time, constantly maxing out credit cards suggests dependency on borrowed money.
What you can do:
Keep your credit utilisation ideally below 30% of your total available limit.
3. Short or Thin Credit History
A high score built over a short period may not carry the same weight as a long, stable credit history. Lenders prefer borrowers who have managed credit responsibly over several years.
What you can do:
Maintain old credit cards, avoid closing long-standing accounts, and build a balanced mix of credit over time.
4. Too Many Recent Loan Applications
Applying for multiple loans or credit cards within a short period can raise red flags. It may signal financial pressure or uncertainty, even if your score remains high.
What you can do:
Space out loan applications and apply only when truly necessary.
5. Income or Job Stability Issues
Banks don’t rely solely on credit scores. They also evaluate income consistency and job stability. Frequent job changes, irregular income, or unclear salary documentation can lead to rejection.
What you can do:
Ensure you submit proper income proof, salary slips, bank statements, and have a stable employment record when applying.
Other Factors That Can Hurt Approval Chances
- Errors or outdated remarks in your credit report
- Weak financial profile of a co-applicant
- Incomplete or incorrect application details
- Mismatch between declared income and bank statements
How to Improve Your Chances Next Time
- Review your credit report and fix any errors
- Reduce outstanding debts before applying
- Maintain low credit utilisation
- Avoid frequent credit enquiries
- Keep documents accurate and up to date
Final Words
A 750+ CIBIL score is a strong advantage, but it doesn’t guarantee approval on its own. Lenders look at your complete financial picture — income, stability, debt levels, and repayment behaviour. By strengthening these areas, you can significantly improve your chances of getting your loan approved smoothly.
