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

What is CIBIL Score in India?

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:





“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.



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



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



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



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?

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:



What can affect these factors?

Payment history


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


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


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


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?

How to improve your CIBIL Score?