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CIBIL Score

The Credit Information Bureau (India) Ltd, better known as CIBIL, is the premier agency for providing credit reports and scores pertaining to individuals. CIBIL sources financial data of individuals such as loan and credit card information from leading banks and other financial institutions in India. This data is then presented in the form of a CIBIL credit report, also known as a Credit Information Report (CIR).

CIBIL was incorporated in 2000 and has continued to expand its presence throughout the country. It is backed by TransUnion International and Dun and Bradstreet, which are major global credit bureaus and agencies

What is a CIBIL Score?

The Credit Information Bureau (India) Ltd, popularly known as CIBIL is a Reserve Bank of India (RBI) authorised credit agency. It offers CIBIL scores and CIBIL reports for individuals. A CIBIL score is generated by the bureau after considering an individual’s detailed credit information. The agency also offers credit report services to the banks and other NBFC (Non-banking financial companies). A CIBIL score is a three-digit number between 300-900, 300 being the lowest, that represents an individual’s credit worthiness. A higher CIBIL score suggests good credit history and responsible repayment behavior. CIBIL scores are calculated on the basis of at least 6 months of historical financial data of an individual. The data is fed into an algorithm with 258 different variables; each with a different weightage.

A CIBIL Score is a numeric summary of credit history that is calculated based on the following factors:

Track Record of Past Payments	Record of all past repaymentsConsistently making payments on time leads to a higher scoreDelayed payments leads to a lower scoreRecent delayed payments makes a more negative impact
Previous Settlements, Defaults, Write-offs	Recent write-offs impact more negatively than older onesMultiple write-offs lead to lower scoreWrite offs documented by lenders on previous debts lower scoreDelays or defaults on secured loan repayments impact more negatively than unsecured loans
Loans as Proportion of Income	Low loan balance indicative of healthy credit usage and thus higher scoreHigh loan balance reduces score
Secured Loans vs. Unsecured Loans and credit cards	High credit card balances lower scoreReliance on unsecured loans (credit cards) over secured loans viewed negativelyLesser number of such accounts coupled with frequent payment history pushes up score
Loan Equities	Many loan enquiries to avail loans indicative of “credit hungry” behaviour, negatively impacts score