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What is CIBIL Score: Full Form, How to Check & Importance

What is the Full Form of CIBIL?

One of the main agencies that provide credit reports and scores in India is the Credit Information Bureau (India) Ltd (or CIBIL), which is backed by TransUnion International.

CIBIL gets financial information about individuals from banks and financial institutions. This includes their loan and credit card information, which is then compiled into a Credit Information Report (CIR) and individual credit scores.

What is CIBIL Score in India?

A CIBIL credit score is a three-digit number between 300-900, with 300 being the lowest possible score and 900 is the highest. This score is said to represent a person’s “creditworthiness”. A higher CIBIL score shows that a person has displayed good credit history and responsible repayment behaviour.

A person’s CIBIL score is calculated using their detailed credit information from at least the past 6 months. An algorithm uses this data, along with various other variables to calculate the final CIBIL score.

What is Good and Bad CIBIL Score?

As we have already mentioned, a CIBIL score ranges from 300-900. Generally, a CIBIL score of 750 is considered good, and the individuals are seen as responsible borrowers by lenders. Here are the different ranges of a CIBIL score:

CIBIL Score	Category	Meaning
NA/NH	“Not Applicable” or “No History”	If you do not use a credit card, or you have never taken a loan, you will not have a credit history.
300-549	Poor	You have shown irregular repayments or defaults on credit card bills or EMIs, High credit exposure, You will be considered at a high risk of turning a defaulter, and will find it difficult to get a loan or a credit card
550-649	Fair	Some irregularities with your past payments, such as late payment of credit card bills/EMIs or multiple credit inquiries, A few lenders would consider offering you credit, but your interest rates might be higher
650-749	Good	You have displayed responsible repayment behaviour and have a longer credit history, While most lenders will consider your credit and loan applications, you might not get the best deals on the rate of interest
750-900	Excellent	You have been regular with your credit payments and have an exemplary credit history, Banks and lending institutions will consider you a low risk of turning into a defaulter and will offer you better deals on loans and credit cards

Why is a Good CIBIL Score Important?

Having a good CIBIL score (i.e., one between 700 and 900) is something that is very beneficial. This score is taken into account by banks and other lending institutions when considering loan and credit card applications. Thus, it can give these potential lenders more confidence in approving your requests for credit.

It may also result in some other benefits for you, such as:

Lower interest rates on loans
Higher credit amounts
Better repayment terms, such as a longer or more flexible repayment tenure
A quicker loan approval process
More choice of lending institutions

How is CIBIL Credit Score Calculated?

A person’s CIBIL score is calculated using four main factors. Each of these factors will have a different weightage on your final score. These factors are:

Factors	Weightage	What can affect these factors?
Payment history	30%	Timely payments of your credit card bills, loans, and EMIs can help to maintain a good score, Delayed or defaulted payments will make your credit score lower.
Credit Utilization	25%	Credit utilization is the amount of your credit limit that you use. If this is high, it will bring your score down, Ideally, you should spend no more than 30% of your credit limit, so that you are not seen as increasing your debt.
Credit Type and Duration	25%	The type of credit you have is also important. There are two main types - unsecured loans (ex. credit cards and personal loans) and secured loans (ex. auto loans or home loans). It is recommended to have a healthy mix of both, The age of your credit history is essentially how long you have had a credit account, as well as the time you have taken to repay your loans.
Credit Enquiries	20%	The number of times you have applied for credit can affect your score, especially if they are made within a short period of time. This includes applying for credit cards, loans, etc, A higher number of enquiries can bring your score down.

Maintaining a good CIBIL score can be a slow process. You need to display consistent and timely repayment behavior, and also handle the credit available to you in a responsible manner to keep your score high.

How to check your CIBIL Score?

The Reserve Bank of India has made it mandatory for all the credit information companies to allow users to check credit scores online and provide one free credit score report each year. This can be done easily through the CIBIL website.

How to check CIBIL Score Online

These are the steps to be followed:

Step 1: Go to the CIBILwebsite, and click on the Know Your Score or Get your CIBIL Score option.
Step 2: Login using your login credentials, or create a new account. To do so, you will need to use your name, contact number, and email address and create a password.
Step 3: You will also need to attach an ID proof (passport number, PAN card, Aadhaar or Voter ID), and additional information, such as your PIN code and date of birth.
Step 4: Once this has been completed submit the form.
Step 5: You will then receive an OTP to your registered phone number and email-id to verify your identity.
Step 6: Once you type in the OTP and verify, you can log in and go to the dashboard to check your CIBIL credit score.
Step 7: You will be redirected to myscore.cibil.com, where you can log in using your details. Here, you will be able to see your credit score.

To get your credit report

Step 8: On your dashboard click on the “Credit Report” option.
Step 9: You will be taken to an authentication page where you need to fill out additional information related to your credit history, such as questions about your loans and credit cards. You will need to answer at least 3 out of 5 correctly to authenticate your identity with CIBIL.
Step 10: Once authenticated, your complete credit report will be delivered to your registered email-id within 24 hours

Remember you can check your credit score only once a year for free. If you wish to receive more frequent credit reports, you can do so by paying CIBIL for this information. Currently, the rate is around ₹550 for a credit report.

How to check CIBIL Score Offline

You can also get your CIBIL credit score and report physically mailed to you by following these steps:

Step 1: Download the Credit Score Request Form from the CIBILwebsite.
Step 2: Print it out and fill in all the required information correctly.
Step 3: You will also need to attach a copy of your ID proof (such as passport number, PAN card, Aadhaar or Voter ID).
Step 4: Also attach a Demand Draft made out to “TransUnion CIBIL” This should be for ₹164 (for just a credit report) or for ₹5500 (for both credit report and credit score).
Step 5: Once this has been completed send the above documents through email, post or courier to:
- If sending by email, send the scanned documents to cibilinfo@transunion.com
- If sending by post, send the documents to:

TransUnion CIBIL Limited (Formerly: Credit Information Bureau (India) Limited)
One Indiabulls Centre,
Tower 2A, 19th Floor, Senapati Bapat Marg,
ElphinstoneRoad,
Mumbai – 400013

Step 6: Your credit score and report will be mailed to the address you had given in the form, or to your registered email address.

How to improve your CIBIL Score?

Having a high CIBIL score is important, as it can help banks and lending institutions decide in your favour when you apply for loans and other credit. Since this is beneficial, here are a few ways you can improve your CIBIL score:

Check your CIBIL score regularly so that you know exactly where you stand.
Review your credit report regularly so that you can rectify any errors quickly.
Pay your EMIs and credit card bills regularly and on time; avoid any missed payments and delays.
Do not use too much of your credit card limit, and keep your credit utilization ratio (CUR) within 30%.
Try to increase your credit limit (i.e. the total spending limit of your credit card).
Avoid applying for multiple loans or credit cards within a short period of time.
Unless it is necessary, do not cancel your old credit cards; older cards can reassure lenders that you have a responsible credit history.

A person’s CIBIL score is a representation of their borrowing history. This number helps banks and lending institutions determine their “creditworthiness,” or the likelihood that they will default on a loan or credit.

Having a higher CIBIL score can offer a number of benefits, such as lower interest rates, while a low score can lead to loan applications getting rejected. It is simple to maintain a good CIBIL score, so that one can easily access credit opportunities whenever needed.