CIBIL (Credit Information Bureau (India) Limited) score is a numeric representation of an individual’s creditworthiness.
It is a credit score generated by the Credit Information Company (CIC) called TransUnion CIBIL in India. CIBIL is one of the four CICs authorized by the Reserve Bank of India (RBI) to maintain the credit information of individuals and businesses.
The CIBIL score is a three-digit number ranging from 300 to 900, with 900 being the highest score.
It is based on an individual’s credit history, including their borrowing and repayment behaviour related to credit cards, loans, and other credit facilities.
The score is calculated using various factors such as repayment history, credit utilization, length of credit history, credit mix, and recent credit behaviour.
Lenders, such as banks and financial institutions, use the CIBIL score to assess an individual’s creditworthiness and determine their eligibility for loans, credit cards, or other credit products.
A higher CIBIL score indicates a lower credit risk and enhances the chances of getting credit at favourable terms, including lower interest rates and higher credit limits.
On the other hand, a lower CIBIL score may lead to difficulties in obtaining credit or may result in higher interest rates and stricter terms.
It is important for individuals to maintain a good CIBIL score by making timely repayments, keeping credit utilization within a reasonable limit, and maintaining a healthy credit mix.
Regularly checking one’s credit report and resolving any discrepancies or errors can also help in maintaining a good credit score.
