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What is a CIBIL credit score?

How do you really know if you’re “credit-worthy”? It all starts with your CIBIL score and report.

What is CIBIL?

Credit Information Bureau India Limited (CIBIL) is amongst the most notable credit information companies licensed by the Reserve Bank of India. Since CIBIL is a part of a larger US-based credit reporting agency, TransUnion, credit scores in India are referred to as CIBIL TransUnion scores.

What is a CIBIL score?

Think of your CIBIL score as the marks you get on a test, only the grader is the CIBIL and the test is your creditworthiness. Your CIBIL score can range from 300-900 with 900 being the highest score. You should aim for 700+ as that's generally considered a good credit score. Your CIBIL score is essentially a summary of your credit profile based on your credit history.

If you receive a score of “NA” or “NH”, it means one of the following:

  1. You don’t have a credit history.

  2. You don’t have enough credit history to be scored, you are new to the credit system.

  3. You have no recent credit activity.

  4. You have no credit exposure, only add-on credit cards.

What factors influence my CIBIL score?

  1. Payment History Timely repayment is crucial. Late payments on loan payback and defaulting on EMIs recently or consistently will negatively impact your credit score.

  2. Credit Utilisation Utilising a high credit amount or increasing the current balance of your credit card indicates you bear a high burden of repayment, negatively impacting your credit score.

  3. Credit Mix Your credit mix consists of secured and unsecured credit. The main difference between the two is that secured credit is guaranteed by an asset (i.e. collateral). Secured credit includes auto loans, home loans, secured credit cards whereas unsecured credit includes personal loans and unsecured credit cards. Too much unsecured credit can indicate a lack of creditworthiness and high risk, negatively impacting your credit score.

  4. Multiple Enquiries Recent applications for and utilisation of high credit through multiple loans and credit cards can negatively impact your CIBIL score. Lenders view such cases with caution as it signals an increased debt burden.


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