14 September 2023

Determine your financial credibility through CIBIL score

CIBIL score

In today’s world, credit plays a vital role in our financial lives and the best way to determine this is the Credit Information Bureau (India) Ltd score, which is better known as CIBIL score. Whether you want to buy a house, get a car loan approved, or even apply for a credit card, your creditworthiness is of utmost importance.

One crucial factor that lenders in India look into while assessing your creditworthiness is your CIBIL score.

We will demystify the concept of CIBIL score, explain how it’s calculated, and help you understand what is a good or bad CIBIL score.

What is a CIBIL score?

CIBIL, is in fact, a credit information company that maintains credit records of individuals and businesses.

A CIBIL score is a three-digit number that documents your creditworthiness based on your credit history. It ranges from 300 to 900, the higher, the better credit profile.

How is the CIBIL score calculated?
The CIBIL score is calculated using various factors from your credit history. Here’s a breakdown of what goes into the calculation:
Credit payment history (35 per cent): This is the most important factor. It includes details about your credit accounts, such as credit cards and loans, and whether you have paid your bills by the due date.

Late payments or defaults can significantly take a big toll and lower your score.
Credit utilisation (30 per cent): This looks at what portion of your available credit you are using.

It’s suggested that you keep your credit utilisation below 30 per cent of your total credit limit. Higher utilisation can lower your score.
Length of credit history (15 per cent): This considers how long you had credit accounts. A longer credit history is usually seen as more favourable.
Types of credit (10 per cent): Having a mix of various types of credit, like credit cards, personal loans, and mortgages, can positively impact your score.
Recent credit inquiries (10 per cent): Each time you apply for fresh credit, it results in a hard inquiry on your credit report. Multiple inquiries in a short timespan can lower your score.

What is a good CIBIL score?

A good CIBIL score is ideally 750 or above. With a score of around 750, you are more likely to be approved for credit applications.

Moreover, you can negotiate better terms and interest rates. Lenders see individuals with high scores as less risky borrowers.

What is a bad CIBIL score?

A bad CIBIL score is below 600. With such a low score, you may face difficulties in securing loans or credit cards.

In case you are given approval, the terms and interest rates offered may be unfavourable as lenders see you to be a high-risk customer.

How to improve your CIBIL score

If you see that your CIBIL score is low, don't worry; there are ways to improve it:

Pay your bills on time: Ensure that you pay all your credit card bills, loan equated monthly instalments (EMIs), and other debt on or before their due dates. Timely payments can have a significant positive impact on your score.

Reduce your credit card balances: If you have high credit card balances, work on paying them down. Lowering your credit card utilisation can help improve your score.
Avoid multiple credit applications: Limit the number of times you apply for new credit in the short term. Each application results in a hard probe, and this can temporarily lower your score.
Maintain a mix of credit: If you have only credit cards or loans, consider diversifying your profile by adding different types of credit.
Use credit wisely: Do not go on a borrowing spree with your credit cards, and only borrow what you can repay.

Responsible credit usage is an important factor for a good credit score.
Monitor your credit report: Regularly check your credit report for inaccuracies. If you find any, get them corrected with the credit bureau.

Get your CIBIL score

Visit the CIBIL official website at www.cibil.com

Click on ‘Get your CIBIL score’: You’ll usually find a prominent button or link on the homepage itself. Click on this link.

Fill out the required information: You will be told to fill out a form with personal and financial information.

Payment: In most cases, you will need to pay a fee to obtain your CIBIL score and credit report.

You can usually make the payment online via a credit or debit card.

Verification: After you pay, you may need to verify your identity via a one-time password (OTP) sent to your registered mobile number.
View your CIBIL score: Once your identity is verified and payment is made, you can view your CIBIL score and access your credit report.


In conclusion, your CIBIL score is a crucial financial indicator which lenders use to assess your credit worthiness, and hence, you must understand your financial credibility and take appropriate steps to keep your CIBIL score high.

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