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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

    • Consistently paying loan EMIs on or before the due date.
    • Paying credit card bills on or before the due date.
    • Paying credit card bill amount in full every time without fail. Not paying the minimum amount due on the bill and instead clear off the bills each month.
    • Avoiding over-leveraging.
    • Maintaining clean financial records without any late payments or pending debts.
    • Having a good balance of secured as well as unsecured credit.
    • Maintaining a low credit utilisation ratio (20-30%) of the actual credit card limit.
    • Checking credit score from time-to-time.
    • Reviewing credit report periodically and ensuring there are no errors in the report.
    • Possessing copies of credit report personally instead of relying on the financial institutions.

    Things that Negatively Affect your CIBIL score

    • Avoid making several credit inquiries at the same time to multiple banks and other institutions.
    • Irregular repayment behaviour in case of loans, utility bills, and EMIs.
    • Turning a defaulter for not paying credit card bills/ making late payments or consistent part payments.
    • Having a large amount of unsecured credit such as multiple personal loans.
    • Getting rejections for multiple applications of unsecured loans.
    • Turning a defaulter as a guarantor for your friends or family members
    • Closing old credit accounts that have a long credit history.
    • Not checking credit score from time-to-time.
    • Not reviewing credit report for a long time.
    • Maintaining a high credit utilisation ratio (more than 40% of the credit limit)
    • Not disputing errors in your credit report for a long time.
    • Having very low or no credit history.
    • Closing credit cards that have a high credit limit.
    • Having only credit cards only loans. You should instead work on maintaining a good balance of both types of credit.
    • Frequently requesting for an increase in your credit card limit.

    A credit score measures your creditworthiness. It helps lenders take a sound decision regarding your ability to pay back the borrowed credit. When you have a high credit score, lenders like banks and non- banking financial companies (NBFC) will be willing to offer you a loan or a credit card. A credit score is calculated after taking into consideration several factors like payment history, credit exposure, the age of credit history, type of credit and total debt.

    Banks, NBFCs or licensed lenders with whom you transact, submit all your account details to credit rating agencies. Rating is done according to the criteria set by each agency. Your credit scores from two different credit bureaus can vary as each bureau have their own scoring model. Therefore, the variation in your credit scores is normal as well as valid. However, there are several myths that revolve around your credit score.

    Let’s take a look at some of the popular myths that you should know about:

    • Don’t assume that your credit report will always be accurate

    Credit Reports cannot always be accurate and there is a good chance that it will have errors. Therefore, you should check your credit report periodically to see if there are any wrong credit entries or missing records of a loan instalment. It is also possible that you are a victim of an identity theft hence, it is not safe to assume that your credit report is error-free.

    • You cannot get a free credit report

    As per the guidelines of the Reserve Bank of India (RBI), you are entitled to get one free credit report that contains your credit score, in a financial year. It is mandatory for all the credit bureaus in the country to offer one free credit report to consumers.

    • Closing your credit card will help your credit score

    One of the factors that can bring down your credit score, is cutting down the length of your credit history. Hence, it is advised to keep all your old credit cards open even if you are not using them. By keeping the cards open, you get a long credit history that helps you improve your credit score.

    • No credit history equals to no credit score

    A majority of people do not own or use a credit card, as they believe that they will still have a good credit score. It must be noted that, if you do not use your credit card, you will not have a credit history and therefore credit bureaus will not be able to compute your credit score.

    • 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 behaviour.

    • Low credit score means no credit card

    Lenders trust consumers with a high credit score as they are less likely to turn into a defaulter. However, each lender has a different policy and some of them might still consider your credit card application even if you don’t have a high credit score.

    • 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.

    • Checking your credit score will bring it down

    This is one of the most common myths associated with your credit score. It must be noted that even if you check your credit score multiple times, it will have no effect whatsoever on your credit score. When you check your own CIBIL score, it is termed as a soft enquiry and it is completely harmless. On the contrary, when your bank or lender initiates your credit check, it is considered a hard check and this has a negative impact on your credit score.

    • 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.

    • Standing as a co-applicant has no effect on your credit score

    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.

    • Other credit bureaus also have access to your credit records

    All the four credit bureaus in the country viz, TransUnion CIBIL, Equifax, Experian Credit Information Company and High Mark Credit Information Services, have the access to your credit records. These credit bureaus are licensed by the RBI. No other credit bureaus can access your credit records.

    • Eligible for loan
    • Discount on interest rates for home or auto loan
    • Credit cards with better benefits
    • Preferential pricing
    • Power to negotiate for better deals
    • Request for a higher limit on credit cards
    • Easy availability of credit such as loans.
    • Quick processing of loan and credit card applications.
    • Possibility of negotiating or waiving processing fees
    • Advantage of requesting for 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

    • Bharti Airtel’s credit rating downgraded to junk by Moody’s

      Moody's Investors Service has downgraded the credit rating of Bharti Airtel for the first time. The credit rating agency has downgraded the telecom operator’s status to Ba1 from Baa3. The Ba1 rating is a non-investment grade rating, or junk rating. In addition, Moody’s has also downgraded the backed senior unsecured notes issued by Bharti Airtel’s African arm by taking into consideration the uncertainty around the company's profitability, cash flow situations and debt levels. The downgrade reflects uncertainty as to whether or not the company’s profitability, cash flow situation and debt levels can improve sustainably and materially, given the competitive dynamics in the Indian telecom market. 

       The credit rating agency estimated that the profitability of Bharti's Indian mobile segment will remain low over the next several quarters. Credit ratings reflect the company's ability to repay debt and raise funds. Ratings range between Aaa, which means best, to lowest category C. Ba1 rating means obligations are judged to have speculative elements and are subject to substantial credit risk but have a superior ability to repay short-term debt obligations. Bharti Airtel reported EBITDA of Rs.26,500 crore for the 12 months ending 31 December 2018, representing a 15.5% year over-year (YoY) contraction. The telco’s profitability of its core Indian mobile segment which contributes around 37% of EBITDA remained low, generating just Rs.9,800 crore over the same period. Last week, the company’s share price dropped 72% in consolidated net income for the three months ended December 2018 at about Rs.86 crore

      5 February 2019

    • Finway rolls out Credit Inclusion Secured Loan

      In a bid to offer a second chance to defaulters to have a healthy credit score, Finway has launched ‘Credit Inclusion Secured Loan’. The company will offer an opportunity to defaulters to improve their credit score and provide secured loans to the borrowers on the basis of a clear marketable property. Rachit Chawla, founder and CEO of Finway said, the new loan will help them improve their poor credit scores via paying EMIs on time. The platform aims to give defaulters an opportunity to change their past records and work towards a better credit future. It will also help them apply and get funds from other financial institutions. At present, lenders like banks and non-banking finance companies lend money to consumers only after checking their credit score and avoid all the defaulters who have not been able to pay their EMIs in the past. However, with simple steps like paying bills on the time, having low credit exposure, not closing old accounts, maintaining good balance of credit mix, and limiting multiple credit inquiries, you can maintain a heathy credit score. With Credit Inclusion Secured Loan, Finway is looking to offer people with a poor credit record, get back on the track and improve their credit score.

      10 January 2019

    • Here’s how short-term loan can boost your CIBIL score

      CIBIL score is a numerical representation of your creditworthiness. It ranges between 300-900, 900 is the highest score. Credit bureaus like TransUnion CIBIL compute your CIBIL score after taking into consideration various factors like your credit history, payment behaviour, the total amount of debt, credit inquiries and others. If your credit score is 700 and above, you are eligible for loan and credit card as well other benefits associated with it. If your credit score is low, there are several ways to improve it. For starters, you should start paying bills/ EMIs on time and also limit your credit exposure to 20-30%. Another way to boost your CIBIL score is to take a short-term loan. It helps if your credit history has a good balance of credit mixes.


      A personal loan is a great resource that can come in handy in case of any financial emergencies. You can easily avail a personal loan as it requires less paperwork and does not need any security. If you manage personal loans in a systematic way, they can help you to bump your CIBIL score. Moreover, personal loans are easier to get and are also cheaper than credit cards as the latter comes with heavy annual/joining fees. Also, it becomes easier to manage just one EMI instead of multiple. As you regularly make payments towards the personal loan, the CIBIL score would gradually recover and increase.


      Other ways to increase your CIBIL score is by making sure there are no errors in your credit report and by keeping a tab on your score from time-to-time. It is advised to consolidate debt as it makes it easier to clear off all your existing debts. Lastly, you should not close your old credit cards as they may have a long credit history and good repayment behaviour.  

      24 December 2018

    • RBI shortlists TCS, Wipro, IBM to set up Public Credit Registry

      In a bid to set up the Public Credit Registry (PCR), the Reserve Bank of India (RBI) has shortlisted six major IT companies - Capgemini Technology Services India, Dun & Bradstreet Information Services India, and Mindtree Ltd, TCS, Wipro and IBM India. The (PCR) will take help of these companies to take out details of all borrowers and wilful defaulters. The latest move comes from the RBI to safeguard the interest of borrowers as well as speed up the credit growth in the banking system. All the aforementioned six companies will now share their proposals to the RBI.


      The PCR will also include data from entities like market regulator SEBI, the corporate affairs ministry, Goods and Service Tax Network (GSTN) and the Insolvency and Bankruptcy Board of India (IBBI) to enable banks and financial institutions to get a 360-degree profile of the existing as well as prospective borrowers on a real-time basis.

      With an aim to tackle the information asymmetry in the economy, the RBI had had announced to set up a PCR for India in June this year. The move also was aimed to foster access to credit and strengthen the credit culture in the country’s economy. Prior to this, the RBI had put together a high-level task force to review the current availability of information on credit, the adequacy of the existing information utilities, and to identify gaps that could be filled by a PCR. The PCR would be the single point of mandatory reporting for all material events for each loan, notwithstanding any threshold in the loan amount or type of borrower. At present there are four privately owned credit information companies (CICs) operating in the country. The RBI has mandated all its regulated entities to submit credit information individually to all four CICs.

      23 December 2018

    • The RBI will soon Tell Your Loan Eligibility and Credit Score

      The central bank is preparing a public credit registry, according to the Reserve Bank of India's (RBI) deputy governor Viral Acharya. The public credit registry will help small traders and industrialists to procure credit, he added. Moreover, as a result of easier risk assessment, the registry will help reduce interest rates for borrowers.

      Credit scores

      Currently, credit scores are calculated by the credit bureaus like CIBIL that are licenced by the RBI. Credit bureaus compute your credit score after collecting your credit history, loans, and repayment behaviour. Your credit score helps lenders like banks and non banking finance companies to decide whether to sanction your loan or credit card application.

      RBI plans

      Last month, the Central board had suggested RBI  to consider restructuring scheme for loans up to Rs.25 crore for stressed assets of borrowers belonging to the micro, small and medium scaled units. These entities have taken the hit after the demonetisation and GST. The government had also pitched for easing the corrective action regulations, under which the RBI had placed 11 of the 21 state-run banks, to help banks to lend more. Acharya stated that RBI is always working on solving credit problems at the grassroots for micro-entrepreneurs in a fundamental way.

      19 December 2018

    • Transfer of excess reserve may pull down credit rating of RBI: Raghuram Rajan

      Ex RBI Governor Raghuram Rajan has stated that transfer of excess reserve to the government may bring down rating of the central bank. If RBI rating slashes from AAA, the borrowing would become costlier for the central bank. This in turn will have an implication for India’s entire economy. Rajan said that although the issue is not yet of a major concern, transfering large amount of excess reserve could become a serious concern at some point of time. Rajan added that India is a ‘Baa’ rated country and it needs to undertake international transactions which require really high credit rating. Highlighting that profit of the central bank largely comes due to devaluation of Indian currency, Mr. Rajan said keeping a portion for the contingency reserves, RBI usually pays entire profit. There seems to be a tussle going on between the RBI and the government over various issues, including transfer of excess capital of the apex bank. Rajan said the issue is not the profit as the government is also looking for the excess.

      18 December 2018

    • 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

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