The CIBIL™ score and report determine the creditworthiness of the individual. A poor CIBIL™ score can lead to loan and credit card rejection. Thus, if you are planning to apply for a loan or take a credit card, you should know what a credit score is and how it works. The inability to interpret this term and know its consequences has led to some popular  CIBIL™ score myths. Let us understand what these myths are and also read in detail about what a CIBIL™ score is.  

What Is A CIBIL TM score?

CIBILTM score is a three-digit number that ranges between 300 to 900. Lenders consider this an important factor in the loan approval process. The higher the score is, the higher the chances of getting credit sanction for the applicant. A CIBILTM score of 750+ is considered very good for the quick approval of loans. The below table shows the interpretation for different ranges of CIBILTM scores.



What it means 


1) The applicant is highly creditworthy


2) This indicates a very good credit history

3) All lenders will be willing to lend 

4) Lenders will give preferential interest rates

700 to 750 

1) Attractive creditworthiness

2) Good score

3) Almost all lenders available

4) Affordable interest rates 


1) Must take steps to improve the credit profile

2) Lower score


3) Not all lenders are available 


3) Will not get attractive offers or interest rates 

Less than 550

1) Poor score and credit history


2) Most lenders will not be ready to lend 


3) Needs to improve the score to obtain any form of credit


Myth 1: The CIBIL TM score Concept Helps Banks and Fintech Organizations Only 

This score not only helps banks and fintech institutions but also customers by helping them utilize their credit properly. In this way, borrowers will be more careful about their finances. 

Myth 2: Higher the Income, Higher the CIBIL TM score

If your income is higher, or if you have got an appraisal, or if you have got a higher payout, it does not mean that you will have a higher CIBILTM  score. The CIBILTM  score is computed based on the credit you have used and whether you have repaid all your debts on time. 

Myth 3: The CIBIL TM score is the only factor influencing your credit application

This is a terrible myth. Because lenders consider other factors like income, assets, current debts, investments, and job stability for sanctioning your credit application. The CIBILTM  score indicates to the lender your creditworthiness and how well you have handled your repayments. And this is just one of the factors influencing your credit application. 

Myth 4: A debit card helps in building your CIBIL TM score

A debit card will not help in building your CIBILTM  score. Applying for a debit card, using it, or just having it will not affect your CIBILTM  score. A debit card just helps you manage the finances in your bank account. 

Myth 5: Nil Credit Helps You Get A Good CIBIL TM score

It is not fine to have nil credit because there is nothing to indicate your creditworthiness. Lenders have no basis to evaluate your financial discipline or your ability to repay the loans on time. So, it is recommended to take loans and credit cards and repay the bills and EMIs on time to build a good CIBIL TM score

What Actually Impacts The CIBIL TM score?

Below are a few factors that can impact your CIBIL TM score.

  1. Timely repayment of your credit card bills – Not paying your credit bills on time impacts your CIBILTM score. Ensure that you pay your credit card bills before the due date and fully. Paying only the minimum amount due can also harm your CIBILTM score.
  2. Too Many loan and credit card applications: Applying for too many loans or credit cards at the same time could show you as credit hungry. Lenders may conclude that you will not be able to pay your future debts efficiently. This may bring down the CIBILTM score.
  3. Ensure A Good Credit mix – Maintaining a good credit mix gives the impression to lenders that you can manage all types of credit very well. Try to strike a good balance between secured and unsecured loans. 
  4. Reviewing your credit report frequently and reporting for errors – Sometimes, the CIBILTM score could be wrong due to discrepancies in your CIBILTM report. You can get the issue rectified as soon as possible by reaching out to the customer care of TransUnion CIBILTM
  5. Credit utilization ratio The credit utilization ratio is the amount of revolving credit you are currently using divided by the total amount of revolving credit available. A credit utilization ratio within 30% is ideal for lenders as it gives the impression that you are not credit hungry and can manage your finances without depending too much on credit. 
  6. Keep good debts on your account - It is a good practice to keep the debts that you paid off on time on your accounts. Lenders will come across these accounts when they see your credit report and they will be more comfortable knowing that you paid off your debts regularly in the past.



It is important to build a good CIBILTM score and also maintain it. It is the most important factor considered by banks and financial institutions before they approve a loan application. With a good CIBILTM score, you can enjoy extra financial coverage to help fulfill all your needs. But, you must know what exactly affects your CIBILTM score and bust the myths surrounding it. 


FAQS of 5 Popular CIBIL TM score Myths That Most Borrowers Believe

1)Does having a good CIBIL TM score alone fetch you lower interest rates? 

When it comes to giving you a loan, the lender will take various factors into account such as the borrower’s income, their age, past credit history, etc. and not just your CIBILTM score alone. If the lender is not satisfied with your overall credit behavior,  he may either reject your application or give you only higher interest rates. 

2)What CIBILTM  credentials should a good borrower have?

The minimum CIBIL™ score for a personal loan should be between 720 and  750. A score in this range will show the lenders that you are creditworthy and will make lenders approve your personal loan application quickly.