In today's world, credit plays a vital role in our financial lives. One of the key factors that lenders consider when assessing your creditworthiness is your CIBIL score.
In this article, we will delve into the full form of CIBIL, what is CIBIL and what is CIBIL score, shed light on its significance, and explain how it impacts your financial well-being.
You must have been wondering what is CIBIL score full form.
CIBIL full form is Credit Information Bureau (India) Limited. CIBIL is one of the primary agencies that offer credit reports and scores in India is CIBIL, which is supported by TransUnion International.
CIBIL obtains financial data about individuals from banks and financial institutions, including their loan and credit card information. This information is then consolidated into a Credit Information Report (CIR) and individual credit scores.
Now that we have talked about CIBIL and its full form, let’s discuss CIBIL score meaning.
A CIBIL credit score is a three-digit number ranging from 300 to 900. A score of 300 is the lowest possible, while 900 is the highest. This score is an indicator of a person's creditworthiness. A higher CIBIL score reflects a person's good credit history and responsible repayment behavior.
To calculate a person's CIBIL score, their detailed credit information from the past six months is used. CIBIL collects data from various sources such as banks, financial institutions, credit card companies, and other lenders. An algorithm takes this data and other variables into account to determine the final score.
Typically, a CIBIL score of 750 is considered good, and lenders view individuals with this score as responsible borrowers.
Let us look at the various ranges of the CIBIL score to understand it better.
| CIBIL score | Remark | Insight |
|---|---|---|
|
NA/NH |
‘Not Applicable’ or ‘No History’ |
If you have never used a credit card or taken a loan, you will have no credit history.Petrol cars cost less than their diesel counterparts. |
|
300-549 |
Poor |
If you have shown irregular repayments or defaults on credit card bills or EMIs, as well as a high credit exposure, you will be perceived as a high-risk individual. |
|
550-649 |
Fair |
Some lenders may be willing to offer you credit despite irregularities in your past payment history. However, you may be subject to higher interest rates. |
|
650-749 |
Good |
If you have demonstrated responsible repayment behavior and have a lengthy credit history, most lenders will consider your credit and loan applications. However, you may not secure the most favorable interest rates. |
|
750-900 |
Excellent |
If you have consistently made timely credit payments and possess an exemplary credit history, banks and lending institutions will perceive you as a low risk of defaulting. As a result, you will be eligible for better loan and credit card offers. |
Let us understand the difference between a CIBIL score and a credit score through the following table:
| CIBIL score | Credit score |
|---|---|
|
CIBIL score is a credit assessment score provided by the Credit Information Bureau (India) Limited (CIBIL) to evaluate an individual's creditworthiness. |
The credit score is a numerical representation of a borrower's creditworthiness and is determined based on various factors, including the duration of credit history, payment history, credit accounts, and credit utilization. |
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CIBIL score is calculated using the individual's credit report obtained by CIBIL from different credit institutions. |
The calculation of credit scores takes into account multiple variables, such as payment history, credit utilization, credit mix, length of credit history, and new credit accounts. |
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The CIBIL score range is from 300 to 900. |
The credit score range is typically from 300 to 850 or 900, depending on the credit bureau. |
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CIBIL is one of the many credit bureaus in India, along with Equifax, Experian, and CRIF High Mark. |
Multiple credit bureaus like Experian, Equifax, TransUnion, and others, exist in different countries |
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CIBIL is a licensed credit bureau that operates under the regulatory oversight of the Reserve Bank of India. |
Credit bureaus in different countries are regulated by respective authorities. |
CIBIL or Credit Information Bureau of India (Limited) is India's first credit information company that collects and maintains credit-related information of individuals and businesses. CIBIL plays a pivotal role in the financial ecosystem by providing credit scores and reports to lenders, enabling them to make informed decisions while assessing the creditworthiness of borrowers.
A CIBIL Score is a numerical summary, consisting of three digits, that reflects an individual's credit history. It is derived from the credit history information found in the CIBIL Report (CIR), which encompasses an individual's credit payment history across different types of loans and credit institutions over a specific period of time.
Different credit-rating agencies have varying criteria for determining good credit scores. However, generally, a credit score above 750 is considered to be good.
To access information regarding your account number or member details, you can purchase your CIBIL Score and Report directly from the official CIBIL website.
No, they are not the same. The credit score refers to a three-digit credit rating provided by different credit-rating agencies like CIBIL TransUnion, Experian, Equifax, and others. The credit rating specifically provided by CIBIL TransUnion is known as the CIBIL score.
Several credit bureaus issue credit scores, including Equifax, CRIF High Mark, Experian, and CIBIL TransUnion. In India, most banks prefer using CIBIL scores when evaluating creditworthiness and making decisions regarding credit extension.
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