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The TransUnion CIBIL Limited came into existence in August of 2000. Started as the Credit Information Bureau (India) in the financial capital of India, Mumbai, CIBIL was the country’s first Credit Bureau. CIBIL began with consumer operations in 2004 and stepped into commercial credit operations in 2006. By 2011, CIBIL Score was accessible to individual consumers as well. Currently working in partnership with TransUnion International, a worldwide credit bureau, CIBIL has credit records of over 550 million businesses and individuals across the country. This article talks about the CIBIL and their Credit Score in detail.


More than often, people consider CIBIL score to be synonymous with Credit Score. However, this is far from the truth. TransUnion CIBIL is a premier credit rating agency among the top four agencies in India. CIBIL has affiliations with almost every other bank in India, estimating the creditworthiness of millions of enterprises and individuals. A great CIBIL score denotes that a person follows great financial discipline and integrity. Every time an individual applies for a credit card or a loan, their recent rating is reviewed. Usually, any score above the value of 700 is considered good enough although some banks have raised the bar while others, do not mind bringing it down a notch.

CIBIL Score Chart

The following is a table depicting the various CIBIL scores and what it may mean.



850 – 900

Indicates that one has never defaulted on their payments even once and is an excellent score.

750 – 850

80 % of loans are approved for people who have a score above 750. This gives them the advantage to bargain for a better rate on credit cards and personal loans.

700 – 750

This indicates that the person is good to go for secured loans. However, for an unsecured loan, the bank may impose a higher rate or investigate further.

500 – 700

This indicates that a person has defaulted on their payments a few times. Personal loans would be hard to obtain, and a private financier may levy a massive interest.

300 – 500

This is considered an inferior score and indicates too many discrepancies in loan repayments to ignore. Unless the person works on improving their score, it would be close to impossible to obtain any credit from any bank in the country.

Factors influencing CIBIL Score

A variety of factors influence the rise and dip of an individual’s CIBIL Score. A few are as follows.

Repayment History

An individual’s behaviour in the past is an indicator of their future. Every time a person avails credit or a loan, the lender is bound by duty to report the same to the CIBIL. The bank takes note of whether an individual repays their debts on time. If an individual makes an effort to repay in advance, it is considered as a positive sign. This indicates that the person can be trusted to repay the amount he owes.

Drastic Increase in Credit

Every earning individual would have a certain credit limit, be it for a loan or a credit card. However, utilising the available credit in its entirety would come off as credit hungry which are seen as red flags by banks. If an individual maintains their certain credit level for all the months but is seen spending significantly more financially, it may result in a dip in the score.

Debt to Income Ratio (DTI)

Typically, lenders do not encourage people to take more debts than roughly 40 per cent of their total income. So, DTI is a measure that is used to estimate the ability of a loan applicant to repay their debts based on their salaries. DTI is considered to be a useful metric to inculcate financial discipline in one’s self so that one would be able to repay their future EMIs without any trouble.

Multiple Loans

It is also a concern to banking authorities when an individual has many loans such as a home loan, personal loans and vehicle loan and various credit cards registered in their name. It is always a good sign to close one before moving on to avail another one.

Uses of CIBIL Score

CIBIL Score is considered to be similar to a progress card report that indicates one’s financial integrity. This score stands as an indication that gives the lender an idea concerning repayment. Listed below are a few reasons as to why a good CIBIL Score is necessary.

Loan Approval

There exists a common misconception that is simple to avail secured finances such as home loans, personal loans and more if one provides the bank with any valuable security. This is not always the case. Bank’s always looked into a person’s past credit behaviour before approving any loans. This is how banks decide an upper limit and an interest rate. With a poor CIBIL Score, it is difficult to avail loans.

Approval of Unsecured Loans

If an individual has no security to offer a bank for a loan, a clean chit from the TransUnion CIBIL is of utmost importance. It is easier for a borrower with a high CIBIL score, of say 700 and above, to get their loans sanctioned without any security. If an individuals score is above 800, they may even get a higher amount than generally given by a bank.

Interest Rates

Interest rates vary for different loans at different banks. Some may get a better deal than others even in the same bank. An excellent CIBIL Score gives you the power to bargain with banks for a better deal. Creditworthy customers have the authority to compare offers from different lenders and negotiate as they are assets for any financial institution.


Another financial instrument that depends mainly on trust and credibility is Insurance. Be it a life cover, medical insurance and so on; insurance companies carefully track history and general handling of debts and dues of any given individual. Therefore, it helps them to determine if one can enjoy a lower premium compared to other policy members with low credit score.

Credit Card Offers

Credit cards can give a host of benefits if used efficiently. Though credit cards allow a definite zero interest period, the interest rates may shoot up drastically if one delays a repayment. With a good CIBIL score, credit card companies would aim to offer one the best possible deal. Alternatively, else, one may even end up with a rejection or an impossibly high-interest rate.

Improving CIBIL Score

Even though one obtains a low CIBIL score, it is not the end of the story. A person may still improve their score by following the below-mentioned elements although it takes over six months and more for such improvements to reflect in one’s credit report.

Avail a recent credit report

Availing a recent credit report will give an individual an idea of their current position and where they went wrong. For example, if their score had dipped due to a couple of delayed payments, they should ensure that it does not happen again. Keeping targets for at least 6 months or so would help one to correct their errors if any.

Never delay payments

It is common to see people pay off their minimum dues and procrastinate on their actual payments. However, CIBIL score greatly fluctuates even when a minimum due is paid. One has to pay their full dues and EMIs on time to keep improve their score. It is a good idea to automate payments at the beginning of a month to avoid unexpected delays.

Creating a diverse credit-folio

This can act as evidence to any lender that one is capable of handling different kinds of credit. Creating a blend of secured loans and unsecured loans can achieve a diverse credit-folio. A high number of unsecured loans would not look favourable in any person’s name.

Getting rid of unused credit cards

Keeping one or more credit cards idle is never a good idea. If there is no use of a credit card, one must make sure to close it with the bank.

Efficient debt handling

An individual’s score can improve well if they know how to handle their debts efficiently. For instance, a credit card works on the concept of revolving credit and may go out of control if not managed properly. In such cases, closing off credit card dues with a personal loan is a great move. One would have to pay less interest and also, can solve an issue efficiently.

Stop maxing out credit

Just because a credit card has a luxurious limit, does not mean that one has to use it all up. Keeping to the Debt to Income Ratio would help one to stay on the safe side of using credit cards.

Avoid prolonging tenures

The tenure of an individual loan or credit is an essential factor that can improve one’s score. For example, if a person has taken a personal loan with a tenure of 3 years, and have raised the tenure midway for a smaller EMI, it may affect their CIBIL score negatively.