CIBIL Score

Last Updated 04th Dec 2016

    CIBIL Score in India

  • CIBIL score or Credit score is a three-digit number ranging from 300-900 which summarizes your credit history.
  • Banks check CIBIL score to judge your credit worthiness and decide your loan eligibility. A high CIBIL score provides you with higher eligibility for loan and at competitive interest rate. CIBIL score of 700 and above is generally considered as best CIBIL score by banks. 90 percent of loan sanctioned have CIBIL score greater than 700. The acceptable Credit score differs according to the loan type applied for and the banks internal credit policy criteria. Maximum CIBIL score to get loan from any bank is 900.

Understand CIBIL Score

Past Payment Track Record

  • Repayment track record of all your past debts
  • Consistent track record of meeting payments on timedrives a higher score
  • Delayed payments lead to a lower score 
  • More recent the delays, more the negative impact

Past Defaults, Settlements, Write-offs

  • Write-offs recorded by lenders on past debts pull down your credit score 
  • Recent write-offs are viewed more negatively than the older ones
  • Multiple write offs lead to a significantly lower credit score
  • Defaults or delays in repaying secured loans (e.g. home loans) are viewed more negatively than those on unsecured ones (e.g. credit cards)

Secured Loans Vs. Credit Cards and Unsecured Loans

  • Greater reliance on unsecured loans (credit cards, personal loans) as opposed to secured loans is viewed negatively
  • Fewer of such accounts with regular payment history support a higher credit score
  • High balances (as proportion of total limit) on credit cards drive down credit score

Loans as Proportion of Income

  • High loan balances (as proportion of income) tend to pull down score
  • Low balances indicate healthy credit usage habit and lead to a higher score

Loan Enquiries

  • Too many loan enquiries made for availing loans in the recent past reflect a “credit hungry” behavior and affect the score negatively

    What is a good CIBIL Score?

  • There is no good or bad score per se but it is found that lenders tend to avoid or be extra cautious granting credit to borrowers with a score less than 700 with CIBIL for secured loans like home loan. For unsecured loans like personal loan and consumer loans, banks in India tend to target customers with a score of 750 or above. Estimate the impact of CIBIL Score Scale from 300 to 900 on your credit health.
CIBIL Score Range What it may mean for your credit health?
750 - 900
  • Excellent Score reflecting impeccable and consistent past repayment track record
  • You are likely to get loans at most competitive interest rates from best banks
  • Subject to eligibility and credit report, you should be able to easily obtain secured loans like home loan and car loan and unsecured loans like personal loan and credit cards
700 - 750
  • Fairly good score reflecting fair past repayment track record
  • You are likely to get loans at competitive interest rates from banks
  • Subject to eligibility and credit report, you should be able to easily obtain secured loans like home loan and car loan.  Before sanctioning unsecured loans like personal loan and credit cards, banks are likely to conduct further credit analysis
550 - 700
  • Lower score reflecting some delays or irregularity of loan repayment in the past
  • Many lenders may avoid sanctioning you loans except with significant credit check
  • Banks and finance companies may still consider your loan application subject to high collateral and low LTV
  • Interest rates offered may be relatively higher
300 - 550
  • Reflects a history of multiple delinquencies and/ or over leverage
  • Your credit report is likely to list more than one write-offs/ settlements/ overdue payments
  • Extremely difficult to obtain loans from organized lenders

    CIBIL Score- Why it is important?

  • Banks consider CIBIL score as a past record of all the payments made by you for loans and credit cards. A clean credit history will help you get a loan at competitive rates. Lower the CIBIL score lesser are your chances of getting loans approved by the bank.

    How to increase CIBIL Score?

  • Make timely and consistent payments of all EMI’s for personal loans, education loans, gold loan and home loan: Pay your credit card dues on time.
  • Balance your Loans: To get good CIBIL score, keep a balance between secured and unsecured loans. You must not have more number of unsecured loans as compared to secured loans.
  • Do not apply for multiple loans in a short span of time: You must not apply for loans in multiple banks in a very short period of time. If your loan application from one bank has been rejected then you must be patient before filing the application with other bank. More the number of loan applications, lesser will be your CIBIL score. Multiple loan application will leave a negative impact on your CIBIL score. Before filing for loan you must work on improving your creditworthiness to get a good score.
  • Keep an eye on your CIBIL Score: Don’t get relaxed if once your CIBIL score was good. You need to continuously watch it. There is a possibility of technical fault on agency’s part due to which your CIBIL score may get affected. To avoid such problems you are advised to keep track of your CIBIL score.
  • Do not spent more than 50 percent of your credit card limit: Your credit card bills define your credit behavior. Limit exhaustion on your credit card shows your credit indiscipline which may affect your CIBIL score

    How to check CIBIL Score?

  • If you want to know exact score online, you must access your CIBIL report online at cibil.com. To get CIBIL scores and CIBIL report you can subscribe from one of the following options listed below:
    • Rs. 550 - CIBIL score and CIBIL report
    • Rs. 800 - Bi-annual subscription (2 score reports)
    • Rs. 1,200 - Quarterly subscription (4 score reports)
  • You can also purchase credit report. The report will only represent your credit history as reported by banks. To purchase the Credit report you need to download the form available on the company’s website and mail the duly filled form on the address given on the form along with the KYC compliant documents and the demand draft of Rs.159.
  • As per government’s new announcement, you can get a free copy of your CIBIL report with CIBIL score from each of the four bureaus after 31st December, 2016.

    Free CIBIL Score?

  • You can also get an estimate of your CIBIL score using MyLoanCare CIBIL score calculator for free by providing all the loan details of the recent and past such as home loans, car loans, personal loan and credit cards.
Note: CIBIL score calculated by MyLoanCare calculator will give you an estimate and actual results may differ. To get exact CIBIL score you are advised to visit cibil.com website.

    Low CIBIL score – Reasons?

    Here can be many reasons for a low CIBI score. These can be classified into two types based on the nature of the reason for low score.

    Low score due to errors by bank:

  • Wrong credit info provided by banks
  • Record not updated even after customer has paid
  • Lenders classifying a/c as “settled with loss” while actually the dues were disputed
  • Lenders showing amount as “overdue” even when the demand is contested by the customer
    Low CIBIL credit score due to past behavior of borrower:
  • Write offs reported, particularly in last 2-3 years on unsecured loans and credit cards
  • Outstanding credit card dues
  • Delay in payment of EMI’s on home loan, loan against property, personal loan, consumer loan, gold loan or any other loans
  • Too many loans already availed
  • High credit availed on credit cards
  • Too many loan applications made in the recent past

    Good CIBIL Score – Why do I need it?

    It is advisable to check your CIBIL before applying for a loan. A low Credit score may hurt your chances of obtaining a loan. At times, small issues with your credit history due to past loans can easily be resolved. A clean credit history makes it relatively easy to avail new loans and at a competitive rate.
  • Some borrowers take loans from banks but then either don’t pay it back at all or delay paying it back or pay back only partially
  • In order to avoid giving loans to such people, lenders check a potential borrower’s credit history before approving a new loan
  • A history of availing excessive credit or defaults or delays makes lenders wary of extending credit to such customers
  • This information is captured in credit information reports compiled by CIBIL and other credit bureaus
On the other hand, a history of availing too much credit or defaults or delays or partial write-offs makes lenders wary of extending credit to such customers. This information is captured in credit information reports compiled by CIBIL and other credit bureaus.
Sometimes, your CIBIL report may either be incomplete or incorrect. In case your loan application has been rejected or held up due to an issue with your CIBIL report, you must check why this has happened to resolve the underlying issue.

    Difference between CIBIL Score, Credit Score and Cibil Transunion Score?

  • CIBIL Score is the there digit credit score of a loan customer calculated by CIBIL, the largest credit agency in India.
  • Similarly, other credit agencies like Highmarks, Equifax and Experian also calculate their respective credit scores and these are referred to as Highmarks Credit Score, Equifax Credit Score and Experian Credit Score respectively.
  • The scores may vary between the various agencies due to difference in history available with them and different weigtages assigned by them.
  • CIBIL Transunion Score is the same as CIBIL Score.
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