Experiences & Skill Learning

Credit Score

A Credit Score, also commonly referred to as CIBIL Score, is a 3-digit number that represents how well you have managed credit, like a home loan or personal loan or your credit cards, in the past. It is primarily a measure of your ability to borrow – calculated basis your past behaviour with credit.

Simply put, your credit score shows lenders whether you are a reliable borrower or a risky one, and the likelihood of you repaying a new loan responsibly.

When you apply for any kind of loan or a credit card, the lender bank or NBFC takes a close look at your credit score and credit history that is maintained in your credit report. Your credit score is calculated out of 900. The higher your credit score, the more likely lenders are to approve you for new credit. Usually, a score of 750 and above is preferred by lenders.

CIBIL or Credit Information Bureau (India) Limited is a credit bureau that maintains and calculates your credit score. While CIBIL is the oldest, there are three other credit bureaus that provide you with your credit report – Experian, CRIF High Mark and Equifax. Each credit bureau calculates your credit score independently on the basis of your credit information that is provided to them by banks and NBFCs on a regular basis. Each credit bureau has its own model for calculating your credit score; hence, your score from each bureau is likely to vary.