Credit Score (CIBIL Score)

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Definition

A credit score, commonly referred to as CIBIL score in India (after TransUnion CIBIL, the leading credit bureau), is a numerical summary of a borrower’s credit history. Scores range from 300 to 900, with higher scores indicating better creditworthiness. Other bureaus include Experian, Equifax, and CRIF High Mark.

Key factors: payment history (35%), credit utilization (30%), credit history length (15%), credit mix (10%), and new credit inquiries (10%). A score of 750+ is considered good for most loans; 800+ is excellent.

Lenders use credit scores as the primary screening criterion. Low scores lead to rejection or higher interest rates. Borrowers should check their score regularly and address any errors with the credit bureau.

Frequently Asked Questions

What is a good CIBIL score? ▾
750+ is considered good for most loans. 800+ is excellent and unlocks the best rates. Below 650, most lenders will reject applications or charge premium rates.
How can I improve my credit score? ▾
Pay all EMIs and credit card bills on time, keep credit utilization below 30%, maintain a good mix of credit types, avoid multiple applications, and check for errors regularly.
How often is the credit score updated? ▾
Lenders report data monthly. Score updates typically take 30-45 days after a change in payment behavior. Check your score at least once per quarter.
Why It Matters

Your credit score is the single most important factor in loan approval and pricing. Even 50 points can mean the difference between approval and rejection, or save thousands in interest.

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