What is a CIBIL score?
A CIBIL score is a three-digit numeric summary of an individual's credit history. It is based on the credit information obtained from banks and financial institutions. The credit score ranges from 300 to 900, with a higher score indicating better creditworthiness.
It is an essential parameter considered by lenders to assess a borrower's creditworthiness before approving loans or credit cards. A good CIBIL score increases the chances of obtaining credit at favorable terms, while a low credit score may result in rejection in loan sanction or higher interest rates.
What is CIBIL score range & how does it work?
CIBIL score is a crucial factor that lenders consider when assessing your creditworthiness. It falls within a specific range, indicating different levels of credit health. Understanding the consumer CIBIL score range is essential for evaluating your financial standing.
The range includes various categories: bad, poor, average, good, and excellent. Lenders analyse your score with a CIBIL score check along with other factors to make informed lending decisions and determine the terms of credit facilities offered to you. The following table can help you understand and check your credit score online.
|CIBIL Score||Creditworthiness||Loan Approval|
|550 and below||Bad||Low|
|500 and 649||Poor||Difficult|
|650 and 699||Average||Possible|
|700 and 749||Good||High|
|750 and 900||Excellent||Very High|
- Poor CIBIL score (550 and below)
A poor CIBIL score indicates a high credit risk. Individuals with this score may face difficulties obtaining credit as lenders perceive them as risky borrowers.
- Bad CIBIL score (between 550 and 649)
A bad credit score suggests a below-average credit history. While credit may be available, it is likely to come with higher interest rates and less favourable terms
- Average CIBIL score (650 and 699)
An average credit score implies an acceptable credit history. While it may not hinder credit availability, lenders might still scrutinise other factors before making lending decisions.
- Good CIBIL score (between 700 and 749)
A good CIBIL score reflects responsible credit behaviour. Lenders generally view individuals with this score favourably, resulting in better chances of loan approval and competitive interest rates.
- Excellent CIBIL score (between 750 and 900)
An excellent CIBIL score signifies a strong credit profile. Borrowers with this score enjoy the best terms and conditions on loans, including lower interest rates and higher credit limits.
How is your CIBIL score calculated?
|25%||Credit Type and Duration|
Several factors influence your CIBIL score. These include timely repayment of credit card bills and loan instalments, maintaining a low credit utilisation ratio, avoiding defaults and late payments, having a diverse credit mix, limiting the number of credit inquiries, and maintaining a long and healthy credit history. A combination of these factors contributes to a positive CIBIL score, while any negative instances can have an adverse impact
What is the importance of CIBIL score?
CIBIL score holds significant importance in the credit ecosystem. Lenders rely on this score to assess an individual's creditworthiness and make informed lending decisions. A high consumer CIBIL increases the likelihood of loan approvals at favourable interest rates and terms.
It also provides individuals with better bargaining power for negotiating loan terms. Additionally, a good credit score enhances the chances of obtaining credit cards, rental accommodations, and favourable insurance premiums. Building and maintaining a healthy CIBIL score is crucial for financial stability and access to credit facilities.
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Frequently Asked Questions
CIBIL, which stands for Credit Information Bureau (India) Limited, is India's first credit information company. It collects and maintains credit-related information of individuals and businesses from various financial institutions and generates credit reports and scores based on this information. The CIBIL score is a numeric representation of an individual's creditworthiness and is widely used by lenders to assess credit risk and make lending decisions.
A credit score report is a comprehensive document that provides an individual's credit information and credit score. It contains details of the individual's credit history, including credit accounts, repayment patterns, credit utilisation, and any defaults or late payments. The credit report serves as a summary of the individual's creditworthiness and helps lenders evaluate the individual's credit risk. It is an important tool for individuals to monitor their credit health and take necessary steps to improve their creditworthiness.
To get a CIBIL score check online for free, you can visit the official website of CIBIL or other authorised credit bureaus. Fill in the required personal and financial information, including your PAN card details, and follow the verification process to check CIBIL score by PAN card. Upon successful verification, you will be able to view your CIBIL score and get a free credit report online. It is recommended to check your CIBIL score regularly to stay updated on your credit standing and take appropriate measures to maintain or improve it.
A good consumer CIBIL score typically falls within the range of 700 to 900. A score in this range indicates a strong credit profile and enhances the chances of loan approvals at competitive interest rates and favourable terms. Lenders consider individuals with a good score as reliable borrowers who have demonstrated responsible credit behaviour. It is important to note that different lenders may have varying criteria for assessing creditworthiness, so it's advisable to check with specific lenders to understand their requirements.
Having a good CIBIL offers several benefits. It improves the chances of loan approvals from banks and financial institutions, often resulting in better interest rates and favourable loan terms. A good score also enables individuals to negotiate better credit card offers, including higher credit limits and attractive rewards programs.