What is CIBIL Score?

CIBIL score is determined by Credit information report. A credit information report (CIR) is a factual record of a borrower’s credit payment history compiled from information received from different lenders. Reports can only be accessed by members who have provided all their data to CIBIL only to take valid credit decisions. The CIR includes:

  • Basic borrower information such as name, address, identification numbers, passport ID, voters ID, date of birth etc
  • Records of loans availed by the borrowers
  • Past payment history of the borrowers and the amount overdue
  • Number of inquiries made on the borrower by different members
  • Suit filed status

The CIR does not contain income/revenue details, amount(s) deposited with the bank, details of borrowers’ assets, value of asset(s) mortgaged, details of borrower’s assets, etc

How to interpret your CIBIL score ?

The Credit Information Bureau (India) Limited (CIBIL) score is a 3 digit numeric summary of credit history. CIBIL score ranges from 300-900 — with 300 being low and 900 being the best score for credit record. In terms of CIBIL score; any score above 750 is considered as good score and it helps borrowers getting their loan application approved easily.

 

The following table shows various aspects of CIBIL score

 

CIBIL ScoreMeaning
850 – 900Great!!! This is fantastic to be for your credit score. It shows that you have never defaulted on your payments
750 – 850Good!!! Not perfect but certainly not bad either. You will be able to secure loan and better interest rate on credit card, home loans and personal loans.
700 – 750Okay!!! Still, try to improve your credit score. It shows that bank will feel safe to provide secured loans but for an unsecured loan, the bank may impose a higher rate.
500 – 700Bad!!! It shows borrower has defaulted on payments many times. In this category getting loan will be very difficult and bank may charge heavy interest rate.
300 – 500OMG!!! This is a bad place to be in.. Otherwise, the borrower works on improving its credit score, it will be impossible to obtain any loan from any bank

How to improve your CIBIL score?

A good CIBIL score helps the borrower to get loans not only approved easily but also at a very attractive rate of interest.

Any score above 750 is considered as good CIBIL score.

Anything lower than that might get you in problem for getting easy loan. Still, person having lower CIBIL score can improve it with following points:-

  1. Pay your credit card dues on time
  2. Use credit card prudently. Don’t exhaust all the limit at one go.
  3. Maintain a healthy mix of unsecured loan and secured loan.
  4. Don’t apply for new credit cards too soon.
  5. Review your CIBIL score every month.