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CIBIL™ (Credit Information Bureau (India) Limited) has formed a collaboration with Transunion an American company and is known as TransUnion CIBIL Limited. CIBIL™ TransUnion score relates to the 3-digit credit score provided by TransUnion CIBIL Limited, one of the leading credit bureaus of India. The credit score helps in monitoring and tracking the credit repayment history of an individual.

What is the importance of the CIBIL™ TransUnion Score?

CIBIL™ TransUnion score is one of the key elements considered by lenders to assess the creditworthiness and potential debt repayment capacity of a borrower before granting the actual loan.

A high CIBIL™ TransUnion score signifies the creditworthiness and financial discipline of a borrower relating to his past debt repayment history. Also, a good CIBIL™ TransUnion score entails a borrower to better loan terms like a lower rate of interest, higher loan amount, extended loan tenure or reduced EMIs. Lenders are also assured of a borrower’s potential ability to pay the debt on time without defaults making getting loans a very easy process.

What is a good CIBIL™ TransUnion Score?

CIBIL™ TransUnion score is in the range of 300 to 900 which is calculated based on your current and past credit history.

  • A score of 750 and above is considered a good score 
  • A credit score inching close to the highest value of 900 is considered an excellent credit score.
  • CIBIL™ TransUnion score in the range between 550 – 700 signifies a medium score highlighting the not so sound financial discipline maintained by the borrower while making debt repayments.
  • Any score between 300 – 549 is called a poor score and a sure indicator for loans or credit card approvals being rejected by banks and financial institutions.

So, aim for a higher CIBIL™ TransUnion score, as it significantly increases your chances of getting a loan/credit card approved. If you are applying for an unsecured loan like a personal loan, then with a higher CIBIL™ TransUnion score you could even get even negotiate with the lender for affordable and favourable loan terms.

How does CIBIL™ TransUnion calculate your score?

CIBIL™ TransUnion initially collates your credit information and maintains credit records with banks and financial institutions. The lenders then provide reports of your credit activities like EMIs payments, any delay or default in paying off credit card bills or EMIs, your existing and past loan details, any debt rejections etc. to the bureau on a regular basis.

CIBIL™ TransUnion then once again collates numerous credit data to calculate your CIBIL™ TransUnion score. The credit score thus obtained shows your past and existing creditworthiness. If you have been prudent in your past financial transactions relating to debt, then the credit report would generate a higher credit score. Any lag in your debt financial dealings would result in a lower credit score impacting your potential loan approval.

Lenders are also assured of your ability to repay future loans on time if your credit score is on the higher side. The generation of the Credit report and CIBIL™ TransUnion score is an ongoing process conducted by CIBIL™ TransUnion for evaluating the creditworthiness and risk attached to a borrower.

What reasons could lead to a low CIBIL™ TransUnion Score?

Common reasons pertaining to a low CIBIL™ TransUnion Score could be

  • Personal information has not been correctly given by the borrower or banks resulting in CIBIL™ TransUnion credit records not being updated with the correct particulars.
  • The borrower has a past or current history of loan outstanding.
  • The borrower has availed various loans or credit cards with different banks or financial institutions.
  • Credit limit has been utilized over and above 30% of the actual limit sanctioned.
  • There has been a delay or default in payment of loan EMIs or credit card dues.
  • The joint account holder has made default or delays in payment of the loan taken under their names

How to improve on your CIBIL™ TransUnion Score?

By inculcating good credit habits, you can improve your credit score.

Clear all outstanding loans/credit card dues 

Avoid any late payment fees on your loan or credit card by paying all outstanding debt on time. This will certainly help you to improve your CIBIL™ TransUnion score.

Low credit utilization 

Always ensure that you do not exceed your credit utilization by more than 30% of the sanctioned credit card limit. Lenders do not prefer borrowers who have a disposition towards high debt, as they consider them a risky option who could default on their credit amount.

Avoid too many debts at one time

Multiple loans or credit cards are a strict no as these hampers your chances of improving your CIBIL™ TransUnion score. You should always keep a gap between different debt so as to have a good credit score.

Regular checking of CIBIL™ TransUnion score 

Keep regularly checking your credit report and CIBIL™ TransUnion to ensure that the information is accurate. Any errors should be immediately applied to be rectified.

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