Before we proceed in details of CIBIL Score System, let us understand as to what CIBIL is. CIBIL is an abbreviation of Credit Information Bureau (India) Limited, an organisation which keeps a record of all credit-related information whether of an individual or the Companies. The records are maintained based on the loans taken (encompasses all types of loans, e.g., home loan, personal loan, business loan, credit card, etc.) and the repayment made on them. The database, so created, is given to the financial institutions when asked to decide on extend ending the loan facilities to the applicant/borrower. CIBIL is now known as TransUnion CIBIL Limited. CIBIL rank is assigned to a company while CIBIL score pertains to individuals.

What Is CIBIL Score?

CIBIL score/rank is calculated by TransUnion CIBIL Limited on the history of payments made on borrowings made by the companies/individuals as per the repayment schedule of the lenders. For example, a default in payment of instalment obtained for the business loan in India will lower the credit rating/score, and one will have difficulty in obtaining new loans at competitive interest rates in the future.

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CIBIL Score is a three-digit numeric value ranging between 300 and 900. The lower figure is rated as bad CIBIL score and a higher value a good credit score for the loan approvals. As an example, a good credit score, generally above 700, will stand a good chance by financial companies sanctioning a business loan in India at a competitive interest rate. The calculations are based on a minimum of six months history and any credit history less than this is not given a CIBIL score but a rating between 1 and 5, which may not meet the requirement of financial institutions to sanction new loans. CIBIL ranking is in the form of digits, from 1 to 10, 10 being the highest rank. Usually, the score/ranking is calculated based on the following guidelines:

  • Repayment history catering to 30% of the score.
  • The number of credits taken and their duration catering for 25% of the score.
  • Exposure of lenders to risk catering for 25% of the score.
  • Credit utilisation, old credit scores catering for 20% of the score.
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The credit score is customarily updated once a month. There may be disputes in the numbers calculated by CIBIL due to non-updated data which can be referred to them online or writing to them. There is a dispute centre which manages all the observations and takes corrective actions.

It should be noted that a high income does not necessarily mean a high credit score and may not ensure fresh sanctions of loans. A low credit score in such a case indicates to the lender of how poorly are the finances managed by the borrower in spite of his high income.

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How Do You Know Your CIBIL Score?

Worried about what might be your CIBIL score? Need to check CIBIL score for your future loan prospects? Well, checking your CIBIL score is no rocket science. All you need to do is visit the official website of CIBIL,, and request for your credit report. Once you have placed your request, you will be asked to submit a set of identification and address proof documents. After that, you will be asked to make a payment to the CIBIL for the report.

You can also request for your CIBIL score offline by either visiting the bureau or via post. If you’re requesting your credit report through the post, you may have to furnish your documents and then sent it. As soon as your documents are authenticated, you will receive your credit report in your mail.

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Membership is available to financial institutions, credit rating companies, insurance companies, and any other company providing financial loans. All credit information companies must become a member of CIBIL. The membership fee is Rs.10,000 plus an annual fee of Rs. 5,000 (excluding taxes).

An individual can check the CIBIL Score through the website by paying a subscription of unlimited access on the following rates:

  • 550 for monthly access
  • 800 for half-yearly access
  • 1,200 for annual access

It is advisable to check the credit reports at regular intervals to see for any frauds, errors, fraud transactions, etc. Such errors are likely to lead to low credit score, thereby causing hardships to get financial help.

CIBIL Score is calculated for transactions for more than six months old. Below six months, the range is estimated to be between 1 and 5, one being the lowest. For more than six months of transactions, the range is between 300 and 900, 300 being the lowest.

One can get the credit score from the following agencies as well:

  • Experian
  • Highmark
  • Equifax

Let us see as to how one reads the CIBIL Report generated in India. The report will contain the following information:

  • Personal Information.
  • Employment Information.
  • Loans availed and repayment records.
  • Enquiries made for availing loans from different agencies.

The government declared in 2017 that the customers could get one free credit report a year. This applies to all credit score calculating companies like CIBIL, Equifax, Experian, etc. It may be noted that each company calculating credit scores have different algorithms to calculate the score. Some of them may be giving short versions of the reports while others may be offering a detailed report. One should realise his/her requirement for short or detailed report and go on to that particular company for obtaining the credit score for loans.

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Reading of CIBIL credit report or any other company’s credit report is essential for checking the correctness of the details which have been worked out to get one’s score. The score is calculated based on the accounts and enquiry section of the report. The score above 700 is generally considered good. The report will contain the following:

  • Name, date of birth, gender, Pan, Passport number, voter identification number, Aadhaar number, etc.
  • Telephone numbers, address, alternate address, etc.
  • CTC, other income details, such as FDs, LIC policies, etc.
  • Loans taken with the name of lenders, type of loan availed (for, e.g. home, personal, business, etc.), bank details with account numbers.
  • Repayment of loans, details of payment, balances yet to be paid.
  • Periodicity of applying for loans, credit cards.

Did you know:

The delay in secondary credit card payments, payments not made by the principle where one is the guarantor, also sabotages one’s credit score.

It is pertinent here to see that one’s credit score is improved from time to time to get further approvals for a business loan in India. The following steps are taken to achieve a good credit score for loan approval:

  • Have no unpaid balances.
  • Keep the number of credit cards to a minimum.
  • See your credit score often and raise discrepancies if any immediately.
  • Pay outstanding amount like EMIs on time.
  • Try and get your credit limit increased.

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Building and preserving a CIBIL score is not rocket science. However, people tend to mess up their credit usage, which does substantial harm to CIBIL scores. If you are mindful of your physical and emotional health and do everything for keeping yourself healthy, then one must ensure healthy maintenance of financial discipline, which discursively makes a significant portion of your overall health pie too.

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