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What is a CIBIL™ score?

A CIBIL™ score is a three digit number between 300 and 900 that gives potential lenders a quick idea of your loan-eligibility. There are three established credit rating agencies, or credit bureaus, that issue credit scores and reports in India – CIBIL™, Equifax and Experian. The scores and reports of all three bureaus are equally valid, though CIBIL™ is perhaps the most well-known.

How is your credit score calculated? Each month, member banks and financial institutions report all details of your credit-related activity to the bureaus. This includes data on every loan or credit card repayment you have made in this period (including any late or skipped payments); any new loan applications; your interest rate; your credit limit on your card; the status on all your loan accounts including any that are ‘Written-Off’ or ‘Settled’ or ‘Closed’.

All this data is then subject to complex statistical analysis to calculate your credit score. If you have a good history of making all your payments on time, you can expect to have a good score. Naturally, the higher your score, the better your chance of being approved for a loan or credit card.

What is a good credit score to have? In general, lenders look for a score of 750 or above to approve a loan. A good score signifies that the borrower has been responsible in making his or her repayments on time and is, therefore, a relatively low-risk customer for the bank. It is possible to secure a loan with a credit score of less than 750, but the process will take much longer and you might have to pay a higher interest rate that will make the loan very expensive.

Why should I know my CIBIL™ score?

When you apply for a loan or credit card, the first thing the bank/financial institution does is to check your credit score to evaluate if you are a high or low risk customer. Your credit score gives them an instant idea of your track record of repayment on your loans. Many times, potential lenders look at your credit score to decide whether to further evaluate your application. If you have a poor score, they may reject your application at the very first stage. So your score is very important as it is the first (and sometimes last) impression lenders have of your loan-eligibility.

What are the benefits that I will receive with a good CIBIL™ score?

A good credit score of 750 or above will enable you to avail of:

  • Low interest rate
  • Higher loan amount
  • Longer tenure
  • Quicker approval process
  • Higher credit limit on your card

How do I find my CIBIL™ score?

You can get your credit score by applying directly on the official CIBIL™ website. Alternatively, CreditMantri can obtain your Equifax credit score for free, if you register for the free Credit Health Check on our website. In addition, you will also get a quick scan on the issues in your credit report – again, at no cost to you.

If you have a low credit score, you can avail of a range of our expert services to improve your score in the most efficient way possible. If you already have a good credit score, CreditMantri can help you compare the various offers on the market and find the products best suited to your needs and affordability. You can also learn how you can lower your EMI costs.

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