What Is A Credit Score/Cibil Score?

What does it mean?

A credit score is an indicator of your eligibility to get a loan or any form of credit. Credit bureaus in India consider several financial aspects to calculate the credit score, which ranges from 300 to 900. 

TransUnion CIBIL is one of the four bureaus that generates the credit score, which is popularly known as a CIBIL score. It is India’s first credit bureau and was incorporated based on the recommendations of the Reserve Bank of India (RBI) Siddique Committee. 

If you have a good credit history, experience with different types of credit and responsible repayment behaviour, then you will have a higher CIBIL score. This makes you a creditworthy individual as per banks, non-banking financial companies (NBFCs) and other financial institutions.

Points to remember: 

• Credit scores are generated based on at least the past 6 months of your financial data. Therefore, ensuring consistent on-time payments will generate a high score.
• A borrower’s loan balance must be low. A high loan balance indicates poor credit usage and hence reduces the score. 
• You must have experience with both secured and unsecured debt for a high credit score. 

Example: A credit score of 600 implies that you have been struggling in making payments. While you will still get credit from lenders, it may come at higher interest rates.

FAQs on Credit Score/CIBIL Score

What is the meaning of the CIBIL score?

CIBIL score, generated by TransUnion CIBIL, is a three-digit score that indicates your creditworthiness, i.e., whether you are a high-risk or low-risk borrower. It ranges between 300 and 900, and a higher score indicates that you are a responsible, low-risk borrower. As such, a high score gives you easy and affordable access to credit, whereas a low score can restrict that access.

What is the CIBIL score in full form?

The full form of CIBIL is Credit Information Bureau (India) Limited score. CIBIL is one of the credit bureaus in India that generates credit scores of individuals and shares the data with banks, NBFCs and other financial companies. 

What is the credit score requirement in India for personal loans or any other loans?

The credit score requirement varies depending on the lender and the type of loan you want. Generally, lenders require a credit score of 750 or above to offer you affordable credit. However, there are some lenders who require lower or no credit scores, like Fibe. 

Is credit score and CIBIL score the same?

The credit score is a general term for the 3-digit score calculated by all credit bureaus. However, a CIBIL score refers to the score calculated by TransUnion CIBIL. 

What is CIBIL score eligibility for a loan?

The minimum requirement depends on the lender. Generally, banks and NBFCs prefer a score above 720. However, there are some lenders who do not rely on credit scores, like Fibe.

How to generate a CIBIL score for free?

You can generate one free report every year on the TransUnion CIBIL website by following these steps.

• Step 1: Go to the TransUnion CIBIL website
• Step 2: Create your account with the required details (name, birth date, ID proof)
• Step 3: Verify your account and log in
• Step 5: Navigate to ‘My Account’ and click on ‘Get Your Free Report’ 

If you have already generated your report, the link will not be available. Instead, you will be able to see the score and report as of the date you generated it. To create a new report, you will have to subscribe to a plan and pay a certain amount.

What is a 777 CIBIL score?

A CIBIL score of 777 is a great score, and with it, you are likely to get your desired loan amount at a competitive rate of interest. Generally, most lenders consider a score above 750 to be good and offer affordable loans to individuals who have it. However, your CIBIL score is not the only criterion that lenders consider. You also need to meet the income, age and other terms set by lenders.