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  • CIBIL Score

    The Credit Information Bureau (India) Ltd, better known as CIBIL, is the premier agency for providing credit reports and scores pertaining to individuals. CIBIL sources financial data of individuals such as loan and credit card information from leading banks and other financial institutions in India. This data is then presented in the form of a CIBIL credit report, also known as a Credit Information Report (CIR).

    CIBIL was incorporated in 2000 and has continued to expand its presence throughout the country. It is backed by TransUnion International and Dun and Bradstreet, which are major global credit bureaus and agencies

    What is a CIBIL Score?

    The Credit Information Bureau (India) Ltd, popularly known as CIBIL is a Reserve Bank of India (RBI) authorised credit agency. It offers CIBIL scores and CIBIL reports for individuals. A CIBIL score is generated by the bureau after considering an individual’s detailed credit information. The agency also offers credit report services to the banks and other NBFC (Non-banking financial companies). A CIBIL score is a three-digit number between 300-900, 300 being the lowest, that represents an individual’s credit worthiness. A higher CIBIL score suggests good credit history and responsible repayment behavior. CIBIL scores are calculated on the basis of at least 6 months of historical financial data of an individual. The data is fed into an algorithm with 258 different variables; each with a different weightage.

    A CIBIL Score is a numeric summary of credit history that is calculated based on the following factors:

    Track Record of Past Payments
    • Record of all past repayments
    • Consistently making payments on time leads to a higher score
    • Delayed payments leads to a lower score
    • Recent delayed payments makes a more negative impact
    Previous Settlements, Defaults, Write-offs
    • Recent write-offs impact more negatively than older ones
    • Multiple write-offs lead to lower score
    • Write offs documented by lenders on previous debts lower score
    • Delays or defaults on secured loan repayments impact more negatively than unsecured loans
    Loans as Proportion of Income
    • Low loan balance indicative of healthy credit usage and thus higher score
    • High loan balance reduces score
    Secured Loans vs. Unsecured Loans and credit cards
    • High credit card balances lower score
    • Reliance on unsecured loans (credit cards) over secured loans viewed negatively
    • Lesser number of such accounts coupled with frequent payment history pushes up score
    Loan Equities
    • Many loan enquiries to avail loans indicative of “credit hungry” behaviour, negatively impacts score

    3 Essential Tips to have a great CIBIL Score

    A CIBIL score of 750 and above is considered as ideal. It is important to have a high CIBIL score as it is useful when you are applying for a loan or a credit card. Keeping your CIBIL score on track since the beginning of the year can help you increase the chances of getting a loan approved easily. Maintaining a healthy CIBIL score is extremely important. Here are some important tips to have a great CIBIL Score.

    • Be Disciplined: Credit Card and loan repayments have the strongest impact on your CIBIL score. Hence, paying all your dues on time should be your priority.
    • Low Credit Utilisation Ratio: Keep your credit utilization ratio at 30% for a good CIBIL score. It is advised to get a credit card with higher top limit, if you are struggling to stay within the existing limit of the card.
    • Seek Variety: It is better to have a good combination of secured and unsecured debt in order to get a high CIBIL score. A Credit Card is an unsecured debt whereas a Car Loan is a secured debt.

    5 Tips to Improve your CIBIL Score

    It is important to have a high CIBIL score as it helps banks decide whether to extend a certain amount of credit to you or not. A good CIBIL score increases your chances for an easier credit approval. Here are five simple and effective ways that will help you improve your CIBIL score.

    • Check and Monitor your CIBIL Score: It is better to know your CIBIL Score regularly, as it will give you an idea about your credit status. You can monitor your CIBIL score by applying for subscription based credit score. In addition, you can also track your score by using free CIBIL score report from the leading credit bureaus in India. Another reason to check your CIBIL score is to see whether there are any errors or false records about your credit account.
    • Review your credit report: In addition to monitoring your CIBIL Score, it is advised to check your credit report as it might have errors. It is better to review your credit report regularly, as you can rectify them on time.
    • Limit your Credit Usage: Maintaining a discipline when it comes to credit card usage is of utmost importance. Make sure you are not exhausting your entire credit limit. Until your CIBIL score reaches 750, it is advised to not spend over 50% of your credit card limit.
    • Increase your credit limit: A credit limit is the total amount you can borrow through the card. Request your credit card issuer to increase your credit limit.
    • Make payments on time: In order to prove that you can manage your debt efficiently, make sure to pay all your dues on time. Avoid delays in paying your bills to maintain a good credit. Never pay partial amounts as it may showcase you as undisciplined credit payer and edge down your CIBIL score.

    CIBIL Score Range

    CIBIL Score Range

    A CIBIL score can range from 300 to 900 with 300 being the bottom end and 900 being the best score possible. Here is what your score could mean.

    0 or -1: If your score is 0 then it just means that you have no credit history created via a credit card or loans. You might want to consider taking one so that you can get a credit history going.

    350 – 550: Alarm bells should be ringing because this is a bad score. It means you have been defaulting on payments and the chances of getting new loans/credit cards are minimal.

    550 – 650: This is an acceptable region to be in since it indicates that you are fairly regular with your payments and can be trusted with new loans and cards. Your loan applications are also likely to be approved.

    650 – 750: You are on the right path. You will not face too many problems with loans and credit cards and should you stick to your current habits, you could reach the best CIBIL scores too.

    750 – 900: This is the best range to be in since it means that you are a financial guru. You are regular with credit payments are have a really good payment history. Banks will tend to be very will to offer you credit products with such a score.

    • It helps in analysing your true financial standing and make plans for future finances.
    • You can be on top of your borrowings and avoid debt traps.
    • With a CIBIL score in hand, you are in a great position to make decisions regarding availing new forms of credit, while also being able to extract the best possible rates from banks or other lenders.
    • It helps in cultivating financial discipline.

    Things that positively affect your CIBIL score

    • On time loan EMI payments.
    • Regular payment of credit card bills.
    • Paying credit card bills in full rather than paying minimum due amount every time.
    • Avoiding over-leveraging.
    • Maintaining strong financial records.
    • Too many forms of credit (such as unsecured personal loans) among family members.
    • Proper utilization of approved credit limit.
    • Ensuring banks and other financial institutions you’re dealing with record and submit positive information to CIBIL.
    • Requesting and maintaining a copy personally rather than through financial institutions.

    Things that negatively affect your CIBIL score

    • Too many credit report enquiries by banks and other institutions.
    • Cheque bounces/dishonours.
    • Irregular loan repayments.
    • Defaulting on credit card bills/ making late payments or consistent part payments.
    • Too much unsecured credit such as multiple personal loans.
    • Multiple applications for unsecured loan getting rejected.
    • Defaulting as a guarantor.
    • High utilization of approved credit limit or overshooting the limit.
    • Errors in record by banks and other finance institutions.

      What makes you more potential to be chosen by lenders to grant a loan or to extend the credit card limit? A good Credit Score it is. Assessing the creditworthiness of an individual mathematically is called a credit score, which is usually in the range of 300 to 900. Credibility or creditworthiness is assessed whether or not to offer a financial product that requires to be repaid over a period of time. A person with a good score has an upper hand over a person with a bad score in terms of banking.

      Credit scoring is based on credit reports that contain a detailed financial history, including personal information, active and inactive bank account details, missed payments, delayed payments etc. Banks, NBFCs or licensed lenders with whom you transact with will submit report to credit rating agencies. Rating is done according to the criteria set by each agency. There could be a minute variation in ratings, but all ratings are considered equally valid. It is good to be well-rated. Keep your credit scores healthy. Do not consider the following assumptions that ruin your credibility:

      • Credit Reports cannot be Assumed to be Accurate Always

      Under no circumstances, you can assume your Credit Reports to be correct and valid always. You are entitled to get a free copy of credit reports annually. Have them handy and review carefully. As mentioned earlier, the information contained in credit reports is massive and should be checked for completeness and accuracy. Outdated, wrong or inaccurate information should be rectified.

      • Credit Utilisation Ratio has Nothing to do with Rating

      A credit utilisation ratio expresses the relation between the amount of credit granted and the actual credit usage. Anything between 30-35% is considered feasible. For instance, if the sanctioned credit limit on your credit card is Rs.100,000, the actual usage should not exceed Rs.35,000 to avoid the consequences of being considered an unsafe financial behavior. People take it for granted. Be cautious while spending more than the cutoff ratio.

      • Ignoring Secured and Unsecured Loans

      Credit card companies and lenders like to observe how effectively you manage various categories of financing. Build your Credit Score through a portfolio of properly balanced secured long-run loans such as housing mortgages and auto loans; and unsecured revolving mortgages like personal loans and credit cards. For instance, making credit card payments in full in lieu of utilising the facility of revolving credit is considered positive.

      • Delayed Payments make no Difference

      People tend to delay payments assuming assuming that have no impact on credit rating. It cannot be done. Deferred payments are a poor practice and reflect an inability to make payments in time. The more the delay, the more shall be the impact on your credibility. Set payment reminders for yourselves to ensure timely payments.

      • Building Credit Without Credit

      Bankers would want to see your previous repayment history. It is tough to build credit with no credit history. Staying away from any type of debt completely might not always be in the interest rate of lending companies. The evidence for previous payments can put you on a higher scale.

      • Closing Old Accounts is a plus

      People assume that closing old accounts like credit cards gives a boost to creditworthiness. It is wrong. Holding and maintaining old accounts mount the average lifespan of your credit history and impact your credibility positively.

      • Standing as a Cco-applicant has no Impact

      Standing as a co-applicant seems reasonable as long as you are sure that the principal borrower can repay debts. The payment obligation will be shifted to you if the principal borrower fails to make payments. It impacts your credibility.

    • Easy availability of credit such as loans. According to the official CIBIL website, about 90% of loan applicants with CIBIL score greater than 700 are approved for loans.
    • Quick processing of loan and credit card applications.
    • Ability to negotiate interest rates owing to your strong financial standing.
    • Though not guaranteed, the possibility of negotiating or waiving processing fees as well as choosing prepayment options.

    How to get CIBIL credit scores online

    CIBIL credit ratings can be checked online by following a few simple steps, as outlined below.

    1. Log on to the official CIBIL website and click on Know Your Score.
    2. Fill up the online form which asks for details such as name, date of birth, address, id proof, past loan history and other relevant data.
    3. On filling the form and accepting changes, you will be taken to the payments page. You can choose from multiple modes of payment such as prepaid cards, credit cards, net banking etc. A payment of Rs.470 has to be made to CIBIL to get your credit report.
    1. After successfully making the payment, you will be taken to an authentication page. Here, you will be required to answer 5 questions related to your credit history of which you will have to answer at least 3 questions correctly to authenticate your identity with CIBIL. Your report will be sent to your email address within the next 24 hours.
    2. If authentication fails, you can fill and send a hard copy of the application to CIBIL by mail. You will subsequently also receive the report by mail.

    Multiple Credit Accounts Impact Your CIBIL Score. Here’s How

    Your CIBIL score is linked to your credit card usage. Multiple credit cards could lead to a higher credit utilisation ratio that can have a negative impact on your CIBIL score.

    What is a CIBIL Score?

    A CIBIL score is a three digit number between 300-900 that represents creditworthiness of an individual. It is computed by TransUnion CIBIL, the first credit bureau in India. The score is calculated on the basis of an individual’s credit history and repayment behaviour. A higher CIBIL score increases your chances of getting a quicker approval for your loan or credit card application.

    However, there are several factors that affect your CIBIL score. Let’s take a quick look at some of them.

    1. Irresponsible repayment behaviour: Your repayment history accounts for 35% of your CIBIL Score. In order to maintain a high CIBIL score, you need to be utmost careful and prompt regarding repayment of your monthly utility bills and EMIs. Delayed payments or non-payments also indicate that you are not serious about paying your debt or that you are incapable of paying them. If you do not have a good repayment history, banks and NBFCs will consider you incapable of handling credit.
    2. Multiple credits: The amount of debt on you accounts for 30% of total credit score. It must be noted that having more than one credit cards or loan does not negatively impact your CIBIL score. However, if your credit utilization ratio is high, it will bring your CIBIL score down. Ideally, you should only spend 30-40% of your credit card limit. A higher credit utilisation ratio suggests you have been increasing your debt. This will not be good for your credit history and will in turn affect your credit score.
    3. Type and length of credit: The age or length of your credit history accounts for 15% of your total CIBIL score while the type of your debt accounts for 10%. Having a good balance of secured as well as unsecured loans helps to boost your CIBIL score. Varying the loans you take will also positively impact the credit score. This indicates that you have a decent experience in handling different types of accounts. Age of credit history is the number of years that have passed since you opened your first credit account. CIBIL consider the average number of years for which you have been holding a credit account.
    4. Hard enquiries: Credit inquiries account for 10% of your total credit score. When a prospective lender or a bank checks your credit score, the enquiry is termed as a hard enquiry. Multiple number of hard enquiries can decrease your credit score as they make you seem credit greedy. Hence, make sure to limit the number of hard enquiries.

    In order to maintain a high CIBIL score you should always make all your payments on time and clear off all the debts. Hence, it is important to check your CIBIL score from time-time. As per a mandate by the RBI, all the credit bureaus in the country (including CIBIL) are required to offer one free credit report to individuals in one calendar year.

    To obtain your credit score and credit report you will need to contact the credit rating agency in India, CIBIL. They will be charges involved to obtain a credit score and credit report. Any individual wanting this report will need to pay an amount of maximum Rs. 500 to obtain this report, the application process with payment applies to both individuals and institutions. Let’s say a bank or financial institutions needs your credit report with your score to check your loan eligibility, even they will need to make a payment for that copy. There are a few websites that will promise to give you, your credit report and score for free, but will ask you to sign up with them or become a member of their website etc.

    Difference between CIBIL Report and CIBIL Score

    A CIBIL report, also known as a Credit Information Report (CIR) is a document listing all your borrowings and repayment histories. The CIBIL score or rating is derived out of this data as well as other variables that affect your financial position.

    CIBIL scores have become the benchmark for credit worthiness in India. While CIBIL was the first Indian credit bureau, other international players have also started providing credit scores in recent years such as Experian Credit Information Company India Pvt Ltd. The importance of credit checks should not be undermined.

    In Detail:

    The credit report is a report that includes your credit score as well as other details on all your financial transactions related to credit. Your credit score is just a part of the report, which has a 3 digit number which will be anywhere in the range of 300 - 900. The credit score is a depiction of your creditworthiness, while your report will include payment history, number of loans, your outstanding balances of any loans, total of your credit limit, loan details of all loans taken from a diverse pool of lenders. The credit report is more like a report card for your credit, and the credit score is like the percentage you get on your report card. The higher your credit score is, the better it is for you. An average score of 750 is considered good for lenders to provide you with good deals and better rates of interest.

    Q. What’s a CIBIL score?

    Banks, as part of their due diligence process, gauge the creditworthiness of individuals based on credit scores. The information listed on your credit report includes several variables that CIBIL uses to set your credit score. CIBIL score, therefore, reflects the extent of the probability of a default. An individual’s credit history is submitted to CIBIL by banks and financial institutions on a monthly basis.

    Q. What do high and low credit score determine?

    A high CIBIL credit score essentially means less probability of a default. A low CIBIL credit score reflects high probability of a default.

    Q. How can you get your CIBIL score?

    Log on to the CIBIL website and click on the ‘know your score’ tab to get a personalized credit score. Fill an online form which requires you to include details such as your name, date of birth, income, identity proof, address and phone number, in addition to the loans taken by you. Following payment of a certain sum, you will have to submit authentication details which include questions based on your credit history. After authentication, your credit score will be emailed to you.

    Q. Will opting for a credit card decrease my score?

    If you have a zero outstanding balance on your old credit card, there is no reason to unduly worry about it and close it. If you have a credit card with a clear payment history, it will not only reflect your responsible credit behaviour but also keep your utilization rate low, which impacts your score positively.

    Q. Does zilch credit mean a good score?

    There are many who avoid loans like the plague, hoping that their CIBIL score will then be perfect. Nothing can be farther from the truth. If you do not borrow, you do not have a credit history and, therefore, no credit bureau can assign a score. Consequently, you might find it difficult to get a loan. Timely repayments are of seminal importance to ensure that your score remains above 750.

    Q. How to check CIBIL score without paying fee?

    The fact is, CIBIL does not furnish your CIBIL report or score without levying a fee for the same. There are online websites and tools that offer to estimate your credit score based on certain input parameters but this score is just an estimated figure and not your actual CIBIL score. Actual score can only be obtained by paying the required fee.

    Q. Why is CIBIL score important for customers?

    Credit score is a distinct numeral assigned to each individual based on analysis of his/her credit report. A higher credit score signifies a health credit history and a lower score signifies a bad credit history. Any score between 700 and 900 is considered good while that below 700 needs to be improved in order to come in the good books of lending and banking entities. You CIBIL score depicts your credit-worthiness as a customers and is hence an important numeric figure. This score is looked up by banks when you apply for any credit channel like loan or credit cards.

    Q. How is CIBIL score calculated?

    CIBIL score is calculated by the Credit Information Bureau India limited in conjunction with various registered credit bureaus of the country. The score takes into account your payment history, payment pattern, your existing credit channels and the amount of credit that you own.

    Q. Is it possible for the CIBIL Score to change?

    The CIBIL Score will change based on the various factors such as any change in loan/credit account, credit repayment history, missed payments, etc. The score can also change when your lender carries out a hard check on your credit report. The information collected from various financial institutions and government agencies is received by CIBIL on a monthly basis. These financial institutions and government agencies are liable to provide credit/loan information of an individual to credit bureaus across India. Based on any information regarding a change in your financial creditability will cause the change in your credit score.

    Q. Is there any other credit bureau apart from CIBIL that provides credit score/report in India?

    There are three other credit bureaus in India apart from CIBIL. TransUnion CIBIL Limited is the oldest credit bureau that has been providing the individual credit score to lenders such as banks to check repayment capabilities of an applicant. The credit score generate by TransUnion CIBIL Limited is called a CIBIL Score, however, the credit reports and scores can also be taken from the other three credit bureaus such as - Experian, Equifax, and CRIF HighMark. They collect the financial information of an individual from various financial institutions and establishments to calculate and generate the credit scores and reports.

    Q. What is Credit Information Report (CIR) and how it different from CIBIL Score?

    Credit Information Report (CIR) is the complete summary of your credit history based on the last 5-7 years of credit and loan accounts. The CIR also contains personal and credit/loan account details including the inquiries’ made by lenders for your credit/loan application. The CIR is a record of your EMI repayments and/or credit card payments. The CIBIL Score is a part of the CIR. The score is an indication of your credit/financial health that is calculated based on the various factors that prepare the CIR.

    Q. Who can access your CIBIL Score?

    Your CIIBL Score can only be accessed by CIBIL Members such as certain banks, your lender, you, and other authorized establishments. These members are required to access the credit report/score only when you apply for a loan or a credit product. Apart from the banks, you can access your credit report/score by making a payment either to CIBIL or to any other credit bureaus.

    Q. How can I check my CIBIL Report?

    You can request for your CIBIL report by visiting the www.cibil.com. You will need to enter personal details such name, PAN card number, date of birth, gender, etc, clear the personal verification process, and make a fee payment in order to access your credit report. CIBIL provides credit reports online as well as a physical copy of it that is sent to your address. Currently, you can access your CIBIL report for free by requesting for it under the once a year 'free' offer.

    Q. Why are the PAN card details required to check the CIBIL Score?

    PAN Card is one of the unique identifiers that is related to all types of financial activities. Whether you are opening a bank account, transacting for a higher value, or taking a loan or credit card, PAN card is required for all these types of application. The credit bureaus in India use PAN card as the major tool that helps in identifying individuals when they are requesting for their credit report. If you are planning to obtain your credit report/score, make sure that you have your PAN card details with you.

    Q. How can I get the CIBIL Score for free?

    If you are requesting for your CIBIL for the first time in a year, you can get it for free. CIBIL offer once a year free credit score upon requests. There are no other websites that can provide you with the CIBIL Score for free. You will need to visit the CIBIL website www.cibil.com in order to request for your credit score/report.

    Q. How CIBIL gets the information of your credit/loan history?

    The CIBIL Members such as banks and other government agencies provide financial information of an individual on a monthly basis to CIBIL in exchange for the access to the credit reports and score prepared by CIBIL for determining their loan/credit applicant's financial credibility. CIBIL collects your financial information related to loans and credit accounts from your bank.

    Q. Will there be any impact to my Credit Score when I check?

    No. When you requesting for your own credit score/report, this is considered to be a soft check that doesn't have any impact on the credit score. But when you apply for a loan/credit, and your lender carries out a check, that'll be considered as a hard check. A hard check can impact your credit score negatively. If your loan application gets rejected, it is advisable not to immediately check with other banks, more hard checks can cause further damage to your credit health.

    Q. Why do the lenders need to check the CIBIL Score?

    While reviewing the loan/credit applications, it becomes essential for the banks to consider the repayment capability of an individual. The credit score and report helps the lenders determine the repayment capabilities of an individual. By referring to the credit score, the banks can identify the applicant repayment habits and decide whether the application can be approved or rejected. The CIBIL Score can be one of the deciding factors involved in determining the interest rate, credit limit, and other essential parts of the loan/credit account.

    Q. What kind of credit/loan account details are included in the credit report?

    A credit report will contain details of your credit and loan accounts. Even if you have closed a credit/loan account in the past, the credit report will include details of that account. The report will show the total credit/loan amount, EMI details, missed/late payment, lender’s name, and other related information. There could be instances where the details entered in the credit report are incorrect, you are advised to get in touch with the credit bureau to remove the incorrect details.

    Q. How to remove errors or incorrect entries from the CIBIL Credit Information Report (CIR)?

    If you have reviewed your Credit Information Report (CIR) and found errors or incorrect entries, you can get in touch with TransUnion CIBIL Limited directly to get it corrected. TransUnion CIBIL Limited will review your request and make necessary changes on receipt of a nominal fee. If you are planning to apply for a home loan, credit card or any other loan/credit product, you are advised to review your CIR so you can fix errors and get your credit score/report updated. You can file a dispute for the scrutiny of the information on your CIR, the credit bureau will carry out a check and update the CIR accordingly.

    Q. Is it possible for CIBIL to delete or amend my credit information independently?

    CIBIL is not allowed to delete or make any changes to the Credit Information Report (CIR) independently. CIBIL collects information from banking as well as non-banking financial companies to prepare CIR. The CIR might have incorrect entries or incorrect details that are collected from the CIBIL members, in that case, once you contact CIBIL to rectify the error, they will obtain clearance from the members along with necessary documents to make changes to the CIR. Hence, you are advised to review your CIR periodically to ensure your credit score is up to date.

    Q. What is CIBIL 2.0?

    CIBIL 2.0 is a new scoring model that TransUnion CIBIL Limited uses to calculate the credit report for individuals. Individuals with a new credit history of 6 months or lesser are assigned a score based on the risk factors involved in lending to new borrowers. The CIBIL 2.0 offers a risk index of 1-5 to individuals with new credit history, the higher the number, the risk of defaulting is lesser. The CIBIL 2.0 is designed to match the current economic and credit trends.

    Q. How can the CIBIL Score affect my application for a new loan or a credit card?

    Currently, when an individual applies for a loan or credit card, the lender (bank) will carry out a credit report/check to make sure the borrower has a positive record of credit repayment. The bank may refer to any of the credit bureaus to obtain a CIR of an individual. Based on the credit score, the bank may decide to approve your reject your credit/loan application. Though the credit score is not the only factor that decides whether your loan/credit is getting approved or not, it is one of the important factors that your lender will look into. A poor credit score will have more chance of loan application rejection compared to a healthy credit score.

    Q. What is a good CIBIL Score?

    The CIBIL Score ranges from 300 to 900 where 300 being a bad credit score to 900 being the best. A CIBIL credit score of 750 and above is considered to be a good score and has more chances of the loan application getting approved. If your credit score is bad, there are various methods that you can use to improve the score.

    Q. What is minimum CIBIL score required for the approval of personal loans?

    The banks and Non-banking Financial Companies (NBFC) do not publish the minimum credit score required for loan approvals, however, they do look into your credit score to make their credit lending decisions. A CIBIL score of 750 and above is considered to be a good credit score, however, the approval will still depend on other factors such as loan amount, employment status, credit history, etc. It is recommended to review the credit score periodically so you can identify the factors that are improving or decreasing your credit score. A credit score that is close to 900 has more chances of a loan application getting approved.

    Q. What is minimum CIBIL score required for the approval of home loans?

    Since banks and NBFCs are not required to publish the minimum threshold of a credit score for home loans, you are recommended to review your credit report/score and take necessary steps towards improving it. The credit score/report is a part of the loan application review, the banks have the liberty to take an independent decision based on their records as well.

    Q. For how long CIBIL keeps the record of the defaulters?

    CIBIL is not required to publish the record of the defaulters, however, the CIBIL CIR contains the details of the defaults of a particular individual. The details of such defaults are on record for a maximum of seven years. Any information that is over seven years old is not included in the CIR.

    News About CIBIL Credit Score

    • Competition Commission Rejects Complaint against CIBIL

      The Competition Commission of India(CCI) has dismissed a complaint against credit information company TransUnion CIBIL. The complaint was filed by Hyderabad-based Venugopal Reddy who is in the business of infrastructure projects. As per Reddy’s allegations, CIBIL was abusing its dominant position against as it did not update his data that led to a low credit score. His complaint stated that the credit bureau reduced its CIBIL score which thereby resulted into rejections for credit card and other services from bank. In a bid to assess the complaint, CCI considered market for the provision of services by credit information companies in India, as the relevant one. As per the regulator, although CIBIL has a dominant position, it has not violated Section 4 of the Competition Act, which pertains to abuse of dominant market position. In case of not updating the date that resulted in a low credit score, CIBIL had already informed Reddy that it was statutorily barred from modifying the credit information without receiving confirmation from the bank. CCI also dismissed the allegation of the company relying on fake data, saying that CIBIL collects information from credit institutions and is only a repository of said information based on which it creates a score.

      29 November 2018

    • Fintech Startup NIRA Secures $1 Million in Seed Funding from Angel in India and UK

      NIRA, a fintech startup that focuses on providing credit to consumers who have low or no credit score, has secured 1 million in seed funding from Angel investors in India and the UK. The Bangalore-based firm offers small credit to consumers who typically have no or limited access to traditional avenues of finance. Founded in 2017, the main aim of the company is to enable users to receive credit anytime. The consumer fintech company plans to use the raised funds to expand the core team and build technology to drive the initial growth of the business.

      Majority of the lenders like banks and non-banking finance companies require a healthy credit score before granting loan or credit card. NIRA combines new types of digital data with traditional forms and assesses user’s credit worthiness even if they don’t have a credit score. The firm has teamed up with Federal Bank to provide loans to consumers at interest rates ranging from 1.5% cent to 2.25% a month. The interest rate is calculated based on the consumer’s risk score. Consumers can repay the loans are in 3-12 months. NIRA is targeting consumers who are in their early part of their careers and earn modest salaries. The consumer finance service which went live in May provides small credit of up to Rs.1 lakh for up to one year.

      A consumer who is an Indian citizen, has a college degree and has been working for a minimum of 6 months can apply for a credit at NIRA. He/She should also earn a salary of Rs.20,000 a month. The consumer has to fill up the required details on the NIRA app or website. Once the consumer has qualified for credit, the required documents – most recent payslip, bank statements for the last six months and Aadhaar number – can be uploaded. The loan will be approved once the documents are verified.

      31 October 2018

    • Punjab: CIBIL score Mandatory Under New Paddy Policy

      The Punjab government has made it mandatory for millers to submit a certified credit report, along with complete (CIBIL) Credit Information Bureau India Limited report. The policy has been initiated to strictly check the allotment of government paddy to non-eligible rice millers. Rice millers who are willing to mill government paddy in Punjab should have a CIBIL score of not less than 600. According to the official spokesperson, the CMR (CIBIL Micro, Medium and Small Enterprises Rank) (CMR) should be 6 or lower. The Punjab cabinet has approved the policy for custom milling of paddy in Kharif 2018-19 in a bid to make sure there is a seamless procurement of paddy from farmers and delivery of rice” into the Central pool from more than 3,710 mills operating in the state.

      4 September 2018

    • AI Powered Fintech Startup Rupeelend Helps you get a Loan Even with a low CIBIL score

      There are several hundred borrowers in the country that do not get access to credit owing to low CIBIL score. Fintech startup Rupeelend, aims to make it easier for borrowers get a loan irrespective of a low credit score. The Gurugram-based startup specialises in providing instant, short-term credit to consumers and businesses. It leverages technology to assess the “true” credit-worthiness of borrowers. As per Rupeelend, the process of approving a loan application for a new borrower takes around 2 hours. The company uses an algorithms that computes an applicant’s creditworthiness by tracking their mobile data usage and social metrics. The startup will need KYC-related documents including Aadhaar card, bank statements, salary slips, PAN card, etc to process applications. Moreover, it also keeps a tab on the applicants credit card transactions and repayment behaviour by accessing their phone and SMS data. Rupeelend was launched in 2016 by Siddharth Ravindran and has a workforce of 80. The startup currently has 25,000 customers and aims to target 1 lakh customers by 2020. It is expecting to garner an annualised net revenue of Rs.8 crore financial year 2018-19.

      14 August 2018

    • How your Credit Score Influences your Finances?

      A credit score is a widely recognized indicator to assess the likelihood of you paying the credit back and your debt-to-income ratio. Your score is directly proportional to the chances of credit card companies and banks lending you credit. A low credit score puts you at the risk of being rejected by banks and Non-Banking Financial Companies (NBFCs).

      Apart from homeowners, even landlords look carefully at a potential tenant’s credit score. Tenants with lower score are usually charged with a heavier safety deposit. Access to capital is crucial to ensure smooth sailing of a business. A good score is essential to efficiently take care of sudden expenses and to easily avail business loans. Many smartphone companies assess a buyer’s credit score. A low score can push them to demand a down payment prior to the purchase of the phone. If you plan on availing a new service as part of utilities, it is certain that the respective company will have a look at your credit. A poor score will prompt them to ask for a deposit upfront, whereas a consumer with a higher score has more chances of availing the service without a deposit.

      A good credit score will directly benefit you with lowered interest rates and increased access to higher loans along with increased Loan-To-Value ratio. It also translates to a wider price range of homes and rewards credit card.

      2 August 2018

    • How to Apply for Loans with Bad Credit Score

      You should not ignore your credit score as it is an important factor to receive quicker approval for your loan or credit card applications. All the banks and non-banking finance companies (NBFC) consider your credit score as it indicates your creditworthiness. Taking a look at your credit score, banks and NBFCs can decide whether they should lend you money. Moreover, your credit score also determines the type of credit you are eligible for.

      What is a credit score?

      A credit score is a numeric presentation of your creditworthiness. It is a 3 digit number between 300-900, 900 being the highest. Generally, banks and NBFCs consider a credit score of 750 and above as ideal. If you have a higher the credit score, it increases your chances of getting quick loan approvals, home loans, personal loans, car loans, low interest rate credit cards, approval for higher credit limits, and so on. Hence, maintaining a healthy credit score is of utmost importance. There are a total of 4 credit information companies (CIC) in India that offer credit reports and credit score. The four credit bureaus in India are; TransUnion CIBIL, CRIF High Mark Credit Information Services Pvt. Ltd., Experian Credit Information Co. of India Pvt. Ltd and Equifax Credit Information Services Pvt. Ltd. All these credit bureaus are regulated by the Reserve Bank of India (RBI). Each credit bureau have their proprietary algorithm to calculate a credit score depending on several factors. According to the Reserve Bank of India (RBI), it is mandatory for all the four credit bureaus in the country to offer one free credit report to its consumers in a calendar year. However, if you want to apply for a loan, but if you have a poor credit score you can opt for a secured credit card.

      What is a secured credit card?

      Generally, all the credit cards a unsecured and hence they require a good credit score that is possible due a long credit history and responsible repayment behaviour. On the other hand, a secured credit card is issued against some security such as fixed deposits with banks. With the help of a secured credit card, you can build a credit history and increase your credit score. In this way, the cardholder can increase the credit limit and also earn interest on the FD account. However, you should be very careful on paying the bills on time once you get a secured credit card. You can get a secured credit card against your fixed deposit for no extra charge and you only have to take care of the processing fee. Make sure to check what are processing and annual fees the banks are charging you for the secured credit card. IA secured credit card availed against a fixed deposit has a credit limit of 80% of amount in the fixed deposit. Once the card is opted for, the amount in the fixed deposit will act as a loan till the card is handed over to bank.

      10 July 2018

    • Credit Scores to become more Dynamic with Additional Data Inputs

      Delay in paying bills, pending debts are some of the critical factors that are considered while calculating your credit score. However, Credit Information Bureau has increased the number of parameters that will make the credit score more dynamic. Satish Pillai, MD and CEO of TransUnion Cibil Ltd has stated that alternative parameters will be taken into consideration to analyse an individual’s credit worthiness. He added that if an individual’s CIBIL score has decreased from 800 to 730, the existing factors considered to calculate CIBIL are not enough to calculate the real creditworthiness of that individual. Hence, CIBIL has made credit scores more dynamic by adding new parameters like how much off credit card dues one has repaid, whether he/she has paid full or minimum amount and so on. More and more banks and fintech companies are opting for this dynamic score model. In addition to PAN details, CIBIL is now considering other data sources like driving license, Aadhar, and Ration Card for the same.

      A CIBIL score is important to banks and lenders as it helps them understand the creditworthiness of an individual. A credit score is a three digit number between 300-900 that represents creditworthiness of an individual. The score is calculated on the basis of an individual’s credit history and repayment behaviour. A credit score above 750 is considered as ideal. A higher credit score increases your chances of getting a quicker approval for your loan or credit card application.

      15 June 2018

    • Bank of India to offer Cheaper Home Loans for Customers with CIBIL Score above 760

      Customers with a CIBIL score of 760 and above are eligible to get a home loan at a cheaper interest rate by Bank of India. These eligible customers will get home loans at marginal cost of lending rate (MCLR) for an year. MCLR is the minimum interest rate of bank below which it cannot lend. If an eligible customer has a credit score of 760 and above and wants a home loan of Rs. 30 lakh and above, he/she will get a loan at 8.40%. However, if your credit score is below 760, you are eligible for home loan at a higher interest rate of 8.50%.

      A CIBIL score is a three-digit number between 300-900 that represents an individual’s creditworthiness. It gives banks and lenders an idea of your credit and repayment history.

      7 June 2018

    • What are the Factors Affecting your CIBIL Score? How can you Maintain a Better CIBIL Score?

      CIBIL score, a three-digit number, represents the creditworthiness of an individual and is computed based on a credit report. The score is offered between 300 and 900. You should have a good CIBIL score to be eligible for applying financial services such as home loans, credit cards, personal loans, mortgage loans, etc. A person with a poor credit score is more likely to be rejected by financial service providers. Sometimes, your CIBIL score is checked while you apply for a visa.

      A CIBIL score is affected by credit history, exposure to credit, credit mix and duration, and other elements. Credit history accounts for 30% of your CIBIL score whereas credit mix and duration accounts for 25% of your CIBIL rating. Other factors account for 20% your CIBIL score and finally, credit exposure accounts for 25% of a CIBIL rating. Can I maintain a good CIBIL score always? Yes. You can definitely maintain a good CIBIL score using the following tips:

        • Make sure you make payments in time

        • You have to maintain a combination of unsecured and secured mortgages

        • Make sure you do not make multiple queries

        • Check your CIBIL score consistently

        • Be consulted from experts who can help you manage a noteworthy credit rating

        • Obtain a copy of credit report from credit rating agencies

      As per a recent report, an individual is not eligible to apply for a loan if his or her CIBIL score is in between 300-599. If your CIBIL score is more than 600 but less than 749, then, you have a good chance of being considered for granting a loan. If your score is more than 750, you are definitely considered to grant a loan. Moreover, a person with a better credit score can negotiate a lower interest rate.

      4 June 2018

    • Here’s how you can Improve your CIBIL Score

      A CIBIL score is important to banks and lenders as it helps them understand the creditworthiness on an individual. Here are some simple steps that will help you maintain a decent credit history and increase your CIBIL score.

        • Make all the bill payments on time and avoid delays. Try not to pay partial amounts as it may showcase you as undisciplined credit payer and bring your credit score down

        • Do not remove or deactivate old accounts as it may harm your score if you have a good repayment history

        • Maintaining a discipline while using a credit card and avoid exhausting your entire credit limit. make sure to not spend over 50% of your credit card limit until your credit score reaches 750

        • It is advised to check your credit report periodically as it may have errors. Also, try to monitor your credit score at equal intervals

      23 May 2018

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