Loan got rejected despite 720 CIBIL. Redditor later found out the four reasons

There are plenty of banks and avenues to get a credit card or loan—but approval isn’t guaranteed for everyone. While your credit score plays a key role, it’s not always the deciding factor. A Reddit user recently learned this the hard way.

The user shared that he had applied for a personal loan last month and was confident of approval, given his CIBIL score of 720. However, to his surprise, the application was rejected. When he contacted the bank, he was told there were “concerns” with his CIBIL profile.

“I had no idea what that meant. I spent three hours going through my actual CIBIL report line by line,” he wrote.

After reviewing the report, he identified four key reasons behind the rejection:

1. The score isn’t the full story

Banks don’t just look at the number—they assess your entire credit profile, including enquiries, repayment history, and account status. A 720 score with a clean record is very different from a 720 with multiple recent enquiries, the Redditor wrote.

2. Old enquiries can linger for two years

The person noted that he had applied for a credit card 18 months ago and forgotten about it. That enquiry was still visible in his report, making him appear “credit-hungry”—even though he never received the card.

3. A ‘settled’ account can hurt your profile

Around three years ago, he had a small credit card dues that he chose to “settle” instead of paying in full. While he assumed this meant the account was closed, lenders view “settled” as a red flag, indicating incomplete repayment. That single mark impacted his loan eligibility.

4. Past credit utilisation still matters

Even though he had cleared his dues, the report reflected that he had used 80% of his credit limit for one month, four months ago. High utilisation—even temporarily—can negatively affect lending decisions.

The takeaway: most people check their credit score, but very few go through their detailed credit report.

Reacting to the post, one user said any CIBIL score below 750 can be seen as a red flag by lenders. However, another pointed out that their credit card application was rejected despite having a score close to 800, along with a good income and no outstanding debt.