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What is a CIBIL™ Score?

CIBIL™ is one of the four authorized credit bureaus in India which provide a credit score, the others being Equifax, Experian and CRIF High Mark.

Your CIBIL™ Score plays an important role in getting loans and credit cards sanctioned, because it gives lenders an accurate idea of your credit-worthiness. The CIBIL™ score ranges from 300 to 900. If a person has a credit score 750 or above, it reflects a good history of repayment behaviour and lenders are reassured that the individual is at high probability of fulfilling all their debt obligations. They are more willing to approve of a loan to individuals with such a score.



There is no set standard on what constitutes a good or bad credit score. A CIBIL™ credit score is based on past and present credit behaviour and gives lenders a snapshot idea of a customer’s credit health and loan repayment record. A credit score above 750 is highly desirable as it denotes a consistent track record of timely payments and demonstrates financial maturity over a long period of time. Lenders feel comfortable lending money to customers with such a credit score.

Banks and other financial institution not only look at the credit score and credit report of a person but also take in to consideration the person’s age, employment, annual income and other factors that influence their payment ability. However, your credit score and credit report are two very important factors in the loan-approval process.


A good CIBIL™ Score means any score of 750 and above. A good score not only ensures a much better chance of loan approval, it also has several other advantages. For instance, a good score means that you might be offered a lower rate of interest, a longer repayment period, a larger loan amount, quicker documentation and loan-approval process. This is because lenders think that you are at low risk of defaulting on your payments and will offer you attractive terms and conditions on your loan that might not be available to individuals with a low credit score. Thus is always advisable to have a good credit score when applying for a loan.

These are some of the reasons for a low credit score:

Past payment history : Even a single late or missed payment can negatively affect your credit score, so it is important to make all repayments on time and in full in order to maintain a good score.

High utilization of credit limit : If you use more than 50% of your credit limit on a regular basis, it serves as a warning signal that you might not be able to manage your finances and spending. This has an adverse impact on your credit score. To ensure a good score, make sure that you do limit your monthly spending to less than 50% of your total credit limit. This will have a positive impact on your credit score.

Too many credit accounts recently opened : If an individual applies for multiple loans and credit cards in a short period of time without corresponding approvals, it signifies that they are ‘hungry’ for credit and may not be able to fulfil their loan obligations. This has a negative impact on their credit score.

Therefore, while there is no fixed minimum CIBIL™ score to apply for a loan, it is recommended that you ensure that you have a score of at least 750 before you apply. If you have a low score, there is a high chance that your application will be rejected, and each rejection causes your credit score to drop even further.

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