Understanding CIBIL Score of -1: Meaning, Impact and How To Improve

  • Published on: 28 Jun 2024
Understanding CIBIL Score of -1: Meaning, Impact and How To Improve

A CIBIL score is a 3-digit number that ranges between 300-900, with 900 being the highest. This score is used by lenders and financial institutions to determine the creditworthiness of an individual before approving any loan or credit card application. A CIBIL score of -1 is not bad. It just means you don’t have a credit history yet. You haven’t borrowed money from any banks or lenders so far. 

So, they have no record of your payments to calculate a credit score.

What Does a -1 CIBIL Score Indicate?

A one-score credit score indicates that the individual does not have a credit history with any lending institution yet. This could be because:

  • You have never taken any loan or credit card before
  • None of your financial transactions have been reported to CIBIL yet
  • You may have an old credit history, but there were no new transactions in the last 2 years

This does not necessarily mean that you have a bad credit score. It simply indicates an absence of credit information as per CIBIL records.

Is a -1 CIBIL Score Good or Bad?

A -1 CIBIL score indicates that you are just starting your financial journey. While having a credit score rather than no score is preferable, a one-score credit score is not necessarily bad.

With no prior credit history, lenders do not have enough data to assess your repayment habits. However, this allows you to build a strong credit profile from scratch. 

Here are some positives of starting with a clean slate:

1. Freedom to Build Good Credit Habits

You can shape your financial behaviour responsibly right from the start. Things like maintaining low debt, paying bills on time and keeping credit utilisation in check help build scores.

2. Avail Secured Credit Options

Secured cards against fixed deposits or credit builder loans allow you to establish a repayment track record. Graduating to unsecured credit becomes easier over time.

3. Qualify for Starter Products

Some lenders can help you build credit. Fibe is one example. They offer loans to first-time borrowers and those who are new to credit. Paying these loans back helps your credit score go up over time. Take advantage of these opportunities.

While a one-credit score may limit your initial credit access, changing it with smart habits is fairly easy. Be patient, and work consciously to establish a strong credit profile.

How is a CIBIL Score Calculated?

A CIBIL score is calculated based on your credit report using the below parameters:

  • Payment History: Track record in repaying past loans and credit cards. This gets 35% weightage.
  • Credit Exposure: Your total debts, like loan amounts, are pending. Higher debt lowers the score. 30% weightage.
  • Credit Mix: It consists of various types of loans and credit cards held, with a 15% weightage.
  • Credit Age: For how long you have held loans and credit cards. Older is better. 10% weightage.
  • New Credit Applications: Frequency of new credit applications. Many applications have lower scores. 10% weightage.

Since you don’t have any credit history in case of a one credit score, none of these parameters can be used to calculate your score.

How to Improve a -1 CIBIL Score?

Here are some ways to build your CIBIL score if you have a -1 score right now:

  • Get a Secured Credit Card: This requires a fixed deposit as collateral. Use it responsibly.
  • Apply for a Credit Builder Loan: This is a small loan to establish a credit history. Repay it on time.
  • Become Co-applicant: Be a joint applicant with someone who has a high credit score.
  • Availing Loans: Take a small loan like a personal loan and repay diligently to build credit.
  • Report Rent: Get rent payments reported to CIBIL to establish a payment track record.

Other Uses of CIBIL Score

While availing credit is the most common use of your CIBIL score, it is also used for:

  • Pre-employment background verification of candidates
  • Verification for visa applications
  • Eligibility for mobile phone connections
  • Determining insurance premiums
  • Rental background checks for tenants

Therefore, checking your CIBIL report and building your credit score is wise. A -1 CIBIL score indicates you need to establish a credit history. With smart financial habits, you can build a strong score over time. Monitor your score and report regularly for errors or discrepancies. A robust CIBIL score makes it easier to avail credit on favourable terms when needed.

You can opt for the Fibe Instant Personal Loan to bridge monetary gaps. When you apply with Fibe, we assess your creditworthiness based on an alternative credit score mechanism. This allows us to approve applicants with lower CIBIL scores as well. Download the Personal Loan App or visit our website to apply now.

Frequently Asked Questions

How do I increase my CIBIL score from -1?

Some tips to increase your one credit score are:

  • Getting a secured credit card and using it responsibly
  • Taking a credit builder loan and repaying it on time
  • Becoming an authorised user on someone’s credit card
  • Taking a small personal loan and repaying it diligently
  • Reporting rent payments to CIBIL regularly

Start small and demonstrate healthy credit habits to build your score gradually from no score.

How do I improve my CIBIL score from -1 to 800+ in six months?

Going from -1 to 800+ in just six months may be unrealistic. However, you can aim to improve to 700+ in six months by:

  • Getting 2-3 secured cards and keeping utilisation under 30%
  • Taking a credit builder loan for 6 months and repaying on time
  • Becoming an authorised user on a credit card with high limits
  • Availing and prepaying a short-term personal loan
  • Ensuring no missed payments or defaults

The key is to have a mixed of credit types and demonstrate exemplary repayment across all debts. Limit new applications and let your score build with time. Be patient and adopt sound money management habits.


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