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What Is a CIBIL Score in India?

Your credit score or CIBIL score isn’t just a number on paper; it’s a door to the opportunity to qualify you for loans and credit cards. And the higher your score, the wider the lenders open that doors for you. It may sound complicated, but this guide will help demystify the concept at length.

The CIBIL Score is a 3-digit number that ranges from 300-900. The closer your score is to 900, the stronger is your credit profile. The score is derived using the credit history found in the CIBIL Report, also known as the Credit Information Report (CIR).

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What is a Credit Score?

A credit score is a 3-digit number that represents the creditworthiness of an individual. In India, there are 4 credit bureaus licensed by the Reserve Bank of India to provide credit scores. All four credit information companies have the database to provide their individual credit score, while the most popular is CIBIL Score.

Credit Information Bureau India Limited (CIBIL)

CRIF High Mark



What is the difference between CIBIL Score and CIBIL Report?

Although both the CIBIL Score and CIBIL Report play a significant role in the approval of your loan application, they have a few differences.


  • CIBIL Score is a 3-digit numeric summary of your CIBIL Report that reflects your creditworthiness based on your credit history and payment behaviour.
  • CIBIL Score is based on the last 24 months of your credit behaviour.

CIBIL Report

  • CIBIL Report is a comprehensive document detailing your credit history that includes your contact details, personal information, loan account and credit card information, employment information, and enquiry information.
  • CIBIL Report includes the last 36 months of your credit history.

CIBIL Score Range

79% of loans are sanctioned to applicants with a CIBIL score greater than 750.

Your CIBIL score ranges from 300 to 900. The higher your score, the better are your chances of getting a loan approved.

How is CIBIL Score calculated?

CIBIL Score is calculated by using an algorithm that revolves around loan and credit card repayment behaviour of an individual. The following 6 key factors are taken into consideration while calculating your CIBIL score:

  • Credit Mix

    Keep a balanced mix of secured (home loans, auto loans) and unsecured credit (personal loans, line of credit). It can have a positive effect on your CIBIL score.

  • Debt to Income Ratio

    Keep your debts such as credit card bills and mortgages lower than 50% of your income to improve your credit score. A higher ratio pulls down your credit score.

  • Payment History

    Do not default on your EMIs. Making late payments and defaulting can negatively affect your CIBIL score.

  • High Credit Utilization

    If your outstanding balance on your credit cards is high, it indicates an increased repayment burden, which can negatively affect your CIBIL Score.

  • Multiple Enquiries

    If you have recently applied or have been approved for multiple loans and credit cards, the lenders may view your credit profile with caution as multiple credit applications reflect your debt burden.

  • Negative Status

    Incidences like a written-off loan, foreclosure, filing for bankruptcy, account in the collection due to default in payments adversely affect your CIBIL score immediately. This warns your potential lender that you are unable to handle your finances for which they might face difficulty in recovering their money.

What is a Good CIBIL Score?

Any score higher than 700 is a good CIBIL score. In other words, a score between 700 and 900 is what you should aim for. It indicates that you have been regular with your payments, and banks and financial institutions find you creditworthy. Some of the benefits of having a good credit score are -

  • A good credit score will fetch you better credit cards with higher limits and better deals.
  • Higher chances of getting a home loan, car loan, or personal loan. Since banks are assured of your financial behaviour and creditworthiness, they won’t reject your loan on this account, at least.
  • A good CIBIL score can help you negotiate or get a lower rate of interest on your loans.
  • You can bargain better and do away with extra expenses like processing fees, etc. on your loan application if your credit or CIBIL score is good.

What is a Bad CIBIL Score?

A score between 300 - 500 is considered to be a bad CIBIL score. A low, poor, or bad credit score is often a reflection of bad credit history. Hence, a bad credit score decreases your chances of getting a loan because your credit profile appears risky to the lender. Even if you are approved for a loan with a low CIBIL Score, it will be with a very high-interest rate. If your credit score falls in this range, it’s a red flag. Take serious measures to improve it.

Importance of CIBIL score for Personal Loan & Credit Card Approval

CIBIL scores play a crucial role when it comes to taking loans. When you apply for any kind of a loan, the first thing the lender does is download your credit report to access your creditworthiness.

If your CIBIL score is high, the odds of you getting a loan are high. You can also negotiate better loan terms and bargain on some fees and charges.

But if your CIBIL score is low, your chances of getting a loan approved are likely to be low. However, if you meet other loan eligibility norms, the lender may grant you the amount you need.

750 and above Great Quick approval process and lowest interest rates
700 - 749 Good Great interest rates
650 - 699 Fair Limited options but can work in your favour
600 - 649 Doubtful High interest rates
Below 600 Needs immediate action Approval chances are very slim

How to Maintain & Improve CIBIL Score?

If you happen to have a low CIBIL score or bad payment history, all is not lost. The good news is that this record doesn’t stay on your credit profiles forever. You can still repair your credit history and improve your credit score. Also, if you happen to have a good CIBIL score, you need to maintain it. Just follow the following tips to get on the path to better credit health:

  • Make your payments on time.
  • Limit your credit utilization ratio.
  • Avoid multiple loans or credit card applications.
  • Try not to exceed 30% of your available credit.
  • Clear or consolidate your debt.
  • Limit your number of credit cards.
  • Diversify your credit portfolio.
  • Check your credit report for errors.

For detailed information on how to read a CIBIL Report, click here.

Difference between Credit Score, Credit Report and Credit Rating?

These terms are very closely related, and it is easy to get confused. The following points should help you differentiate between them. Besides these, there is another related term called vantage score, which is a credit scoring method.

Credit Score Credit Rating Credit Report
This is a 3-digit number indicative of an individual’s credit health. These are the credit scores assigned to a company or business. This is documentation of your financial behaviour with regards to past and present loans and credit.
This can change over time. This can change over time. The information in your credit reports stays for 7 years. It is then replaced by new information.
This varies between 300-900. These are denoted by grades like AAA, AA, B+, A+ etc. This is a compilation of information.


Generally, lenders send credit information to the bureau every 30 days. Smaller lenders may submit the information on a quarterly basis. If you have raised a dispute that has been resolved in your favor, it can take up to 90 days for it to reflect on your CIBIL Report.

Only the CIBIL members, such as you, your lender, certain banks, and other authorized establishments, can access your CIBIL Score. These members can only access the report when you have applied a loan or a credit card with them.

Typically, the more credit experience you have, the better it is for your credit score. Opening a new credit card can decrease your CIBIL Score by lowering the average credit age.

CIBIL, on its own, cannot make any change to your CIBIL Report. It can make the change only when it is authorized and provided by the concerned credit institution.

The record stays with CIBIL for minimum of 7 years.

Typically, a CIBIL Score of 750 or above is required to qualify for a personal loan. A score higher than that not only increases your chances of loan approval, it also gives you the privilege of negotiating loan terms with the lender.

With a low CIBIL score, very few banks or lenders are willing to give you a loan. Even if they do, it will be at a very high-interest rate.

The CIBIL Report is a comprehensive document containing detailed information on the different types of credit accounts you have, such as personal loans, home loans, credit cards, auto loans, etc. The report is divided into 6 sections: CIBIL Score, Personal Information, Contact Information, Employment Information, Account Information, and Enquiry Information.

To initiate a dispute with CIBIL, follow the below mentioned online dispute steps:

  • Step 1: Login to myCIBIL.
  • Step 2: Go to Credit Reports Section. Go to Dispute Center tab and click on Dispute an Item.
  • Step 3: Fill up the online dispute form.
  • Step 4: Select the relevant section you want to dispute.
  • Step 5: Enter a value for the disputed section.
  • Step 6: The system will validate the dispute and send it to the respective credit institution for resolution.

One time CIBIL report will cost you only Rs. 550/- and the credit report will be accessible to you within 3 business days.

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