CIBIL Score Meaning
The full form of CIBIL is Credit Information Bureau (India) Limited. A CIBIL score is a 3-digit numeric summary of an individual’s past credit behaviour based on credit utilisation, credit mix, and recent inquiries, among others. This score plays a vital role in determining one’s creditworthiness, and hence, it is a key factor that lenders assess when extending credit.
TransUnion CIBIL is a leading credit rating agency in India responsible for assigning a score to individuals based on their credit performance. The credit score assigned by TransUnion CIBIL is called a CIBIL score.
Importance of the CIBIL Score
A credit score and CIBIL score are the same, wherein the latter carries the agency's name that assigns it. The CIBIL score ranges from 300 to 900, and individuals are assigned a score within this limit. Here, any score around 300 is considered low, whereas 900 is the highest score one can get.
Generally, a score of 750 and above is considered a good CIBIL score, and individuals can enjoy fast loan or credit card approval if they manage to keep their score above this number. The CIBIL score rating depends on various factors, each carrying a certain weightage. These include:
- Past performance (30%)
- Credit exposure (25%)
- Credit type of duration (25%)
- Other factors (20%)
How to Check Your CIBIL Score Online?
It is important to check your CIBIL score regularly to track any improvement or dip. The CIBIL score can be checked by visiting the official website of TransUnion CIBIL. It allows users to check their credit score for free only once a year. For multiple checks, individuals will have to pay an annual fee, depending on the plan chosen.
Register with CIBIL and know how to check your credit score by following the steps below.
- Click on ‘Get CIBIL Score’.
- Next, click on the ‘Click Here’ to get the Annual CIBIL Score.
- Enter personal information such as name, email ID, password, Aadhaar Card, and PAN Card.
- Click on ‘Accept’ to continue.
- Enter the OTP received in the respective field.
- Click on ‘Go to Dashboard’.
- Log in with your credentials to check the CIBIL score.
Tips to Improve Your CIBIL Score for Home Loan
Follow the tips given below to improve your CIBIL score before availing of a Home Loan:
- Repay existing loans and pay credit card bills on time.
- Avoid applying for unnecessary credits simultaneously.
- Maintain a low credit utilisation ratio.
- Try not to utilise the entire amount you are sanctioned.
- If you are new to credit, opt for a small-value loan with a shorter tenure and repay it sincerely to build a credit history.
- Limit credit inquiry to a minimum.
- Maintain a mix of secured and unsecured credit types.
Also Read: Quick Tips to Improve Credit Score
What is a Good CIBIL Score for a Home Loan?
Generally, a CIBIL score of 750 and above is considered good for all forms of credit. Those with a CIBIL score of 700–750 may also be able to avail of credit, but at less favourable terms.
In the case of a housing loan too, lenders prefer applicants with a CIBIL score of 750 and above. To a smaller degree, they may offer finance to applicants with a score of 700–749, but in such cases, the Home Loan interest rate is likely to be relatively higher.
What is a CIBIL Report?
Besides credit score, TransUnion CIBIL also issues a report known as the Credit Information Report (CIR). It documents the payment history of individuals over a specific period. This report contains all details regarding every loan, overdraft facility, credit card, etc., availed so far by an individual. However, it does not contain details of investments or savings.
Also Read: Most Common Credit Report Errors and How to Fix Them
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