What is CIBIL Score?
CIBIL Score, now known as TransUnion CIBIL Score, is an individual’s credit score which is calculated based on his or her credit history such as loan and credit card payments. CIBIL Score is a 3-digit numeric representation of a person’s past credit behaviour. The credit score ranges between 300 to 900. Having a score of 750 or above is considered good when applying for a loan. Higher the CIBIL Score, the higher your chances of loan approval from a bank or non-banking financial institution. Poor credit scores are perceived as a credit risk and hence lenders may not look favourably upon consumers (borrowers) with low CIBIL scores.
History of CIBIL Score:
Credit Information Bureau (India) Limited, also known as CIBIL, was incorporated in the year 2000. It is the oldest Credit Information Company (CIC) in the country. CIBIL collects and maintains credit information on consumers who have availed loans or credit cards from banks and non-banking financial institutions in India. In 2007, CIBIL Score was introduced to banks and other financial institutions as a generic risk scoring model. CIBIL Score was first made available to individual consumers in 2011.
In 2017, Credit Information Bureau (India) Limited became TransUnion CIBIL after TransUnion had acquired a large stake of 92.1% in CIBIL. As of 2020, TransUnion CIBIL maintains credit records of more than 1,000 million Indian consumers (both individuals and businesses) and has more than 5,000 members which include banking, non-banking, housing, and other financial companies or institutions.
How to Check Free CIBIL Score Online?
You can get a free CIBIL Score and Report once a year from the CIBIL website. Along with a free CIBIL Score and Report, you will also have access to a number of credit tools, information on personal loan and credit card offers based on your credit score, and raise disputes online if there are any inaccuracies or discrepancies in your credit report.
As you know, monitoring your credit history regularly is a good practice to ensure you are eligible for any type of loan. If you want to check your CIBIL Score and Report more than once a year then you will have to purchase a subscription plan from the CIBIL website. Here is how you can check your CIBIL Score online:
- To get your personalised credit score and report, visit www.CIBIL.com.
- Register on the website. Use your login credentials to log in to your account page on the website.
- Click on the ‘Get Your Free Report’ feature on the ‘My Account’ page. This feature may not appear if you have already applied for a free report once in a calendar year. In that case, you will have to make a payment for a subscription plan on the website and click on the ‘Know Your Score’ tab.
- Enter your personal details in an online form such as name, date of birth, address, contact number, email ID, income proof, identity proof, and prior loan or credit details.
- Once your personal information is verified and authenticated, your CIBIL score and report will be emailed to you.
‘’Where can I check my CIBIL Score for free?’’ is one of the frequently asked questions online. There are third-party websites that may offer you the services for checking free CIBIL Score online, however, it should be noted that the score will not be accurate or the same as mentioned in your credit information report compiled by CIBIL.
Factors Affecting Your CIBIL Score:
The 4 main factors that affect your CIBIL Score are payment history, high credit utilisation, credit mix, and multiple enquiries.
- Payment history: Your credit score will be negatively affected if you make consistent late payments on your credit card dues or default on your Equated Monthly Installment (EMI) i.e., loan repayment. It is advisable to make payments on time to maintain a good credit score.
- High credit utilisation: If you make use of too much credit on your credit card limit, it will negatively impact your credit score. If there is an increase in the current balance column on your credit report, it is an indication to lenders that there is an increase in your debt burden which in turn means you are at risk of not paying your credit card dues on time. Therefore, use your credit limit to a minimum.
- Credit mix: It is important to maintain a balance between secured loans (like car loan and home loan) and unsecured loans (like credit card and personal loan) in order to have a positive impact on your credit score. Having too many personal loans and credit cards may be looked upon unfavourably by lenders.
- Multiple enquiries: Having multiple enquiries on your credit report in a short period of time indicates that you have applied for many loans and/or credit cards. Lenders may perceive this type of credit behavior negatively as having too many loans and/or credit cards means higher debt burden. This in turn will bring down your credit score.
Even if you have a poor credit score, there are ways to improve it before applying for a loan or credit card.
How to Improve CIBIL Score?
6 ways to improve your CIBIL Score:
- Pay your EMI and credit card dues on time always.
- Limit your credit utilisation.
- Strike a balance between secured and unsecured loans.
- Don’t apply for too many loans or credit cards in a short time.
- Monitor your joint accounts and co-signed or guaranteed loan/credit card accounts regularly to avoid negligence by the other party as you will be held liable.
- Review your credit history from time to time to check for inaccuracies or discrepancies on your credit report.
What are The Benefits of Having a Good CIBIL Score?
There are several benefits to having a good CIBIL Score such as:
- Getting a higher credit limit on your credit card.
- Availing credit cards with better features and benefits.
- Having higher chances of loan approval.
- Being charged lower interest rates on loans.
- Some lenders may charge lower loan processing fees.
- Being eligible for pre-approved loans.
- Faster approval of your loan or credit card application.
Differences between CIBIL Score and CIBIL Report:
As previously mentioned, CIBIL Score is a 3-digit numeric representation of your credit history.
Your CIBIL score is calculated based on the credit history mentioned on your Credit Information Report (CIR), also known as CIBIL Report.
Your CIBIL Score will range between 300 to 900. It is determined based on your previous credit behaviour as reported by your lenders to the CIC.
The CIBIL report will have your credit payment history over a period of time, be it loans or credit cards that you had obtained from Credit Institutions (CI) across India.
Credit Score is an important loan eligibility criterion. Therefore, it is important to review your CIBIL score periodically before applying for a loan.
Your CIBIL Report will contain your personal information, contact information, employment information, account information, and enquiry information.
750 and above is considered a good CIBIL Score for loan/credit approval. A poor CIBIL Score is perceived as a credit risk by lenders.
If there are any discrepancies in your CIBIL Report, you can raise a dispute online on the CIBIL website to have it corrected with the approval of the respective CI and the facilitation of the CIC.
Frequently Asked Questions on Cibil Score:
A. CIBIL Score is a 3-digit numeric representation of your credit history that sums up your credit behavior such as prior loan and credit card payments. CIBIL Score is one of the important loan eligibility criteria that a lender will check before approving or rejecting your loan. Your CIBIL Score can range between 300 to 900. If you have a CIBIL Score of 750 and above, your chances of loan approval are higher. Even if you have a poor CIBIL Score, you can work on improving it before applying for a loan. There are lenders other than banks who may be willing to lend you credit even with a bad CIBIL Score but you will be charged a higher interest rate as you will be considered a credit risk.
A. Visit the CIBIL website to get your annual credit score and report. Click on the ‘Get your Free Report’ feature on the ‘My Account’ page. If you are checking your credit score for the first time in a calendar year then it is free. However, if you want to check your CIBIL Score more than once in the same year, you will have to pay for a subscription plan on the CIBIL website. You can make free CIBIL Score checks on third-party websites but the score may not be accurate.
A. “If I check my CIBIL score multiple times, my credit score will go down.” is a common myth surrounding CIBIL Score. The fact of the matter is that when a lender requests your credit score and credit report from CIBIL, it is marked as an “enquiry” on your credit information report. An ‘’enquiry’’ made by a lender usually means that you have applied for a loan or credit. When there are many ‘’enquiries’’ made by several lenders in a short period, it is perceived as you being in desperate need of credit and therefore, doesn’t reflect well on your credit behavior. However, when you personally make CIBIL Score checks and access your credit report, it doesn’t affect your credit score as CIBIL doesn’t consider it as an ‘’enquiry’’. What’s more, you are encouraged to review your credit report from time to time to ensure all the details mentioned in the report are correct and there aren’t any discrepancies.