Your CIBIL score is a three-digit number ranging between 300 and 900, that denotes your creditworthiness. A high score can help you get quick approval and better deals on loans and credit cards. For most banks and non-banks, the minimum credit score required for loan approval is 750.
But before you learn about your CIBIL score, it is important to know the meaning of CIBIL and why it is critical to your credit health.
CIBIL stands for Credit Information Bureau India Limited. It is a credit information company that is engaged in the maintenance of records of all credit-related activities of individuals as well as organisations.
Banks, non-banking finance companies, and other financial institutions submit the credit information of customers to the bureau. Based on this information, CIBIL issues a document called the Credit Information Report (CIR) and assigns a credit score to the customer.
This document and the corresponding credit score, commonly referred to as the CIBIL score, is what determines your creditworthiness and tells the lender how likely you are to repay your loan on time. A high score indicates a lesser likelihood of loan default while a low score suggests credit-risky behaviour.
It is important to note that while CIBIL is a repository of credit information, it does not participate in any lending activity. It does, however, provide critical information that banks and lenders use to determine an applicant’s credit profile and identify those customers who have a more reliable history of borrowing.
Apart from your credit score, CIBIL also offers a credit report for individuals and a credit report for companies.
Your credit report contains your credit score as well as important information about your borrowing history, repayment frequency, and a record of repayment defaults and delays if any. The report also maintains data about your employment and contact details.
Similar to an individual’s report, the CIBIL report for companies comprises details about a company’s credit history. It includes data about existing credit, any pending lawsuits, as well as, any outstanding amounts. The bureau fetches this data from financial institutions and meticulously maintains it over time.
Factors such as your repayment history, credit utilisation ratio, and the number of ongoing loans influence your CIBIL score.
It is considered good practice to keep a tab on your credit score at least once a year. Check your credit score for free with Bajaj Finserv. Enter just a few basic details and get access to your score as well as your personalised Credit Health Report.