CIBIL Score Calculation

CIBIL score is a 3-digit number, ranging from 300 to 900, used by lenders to determine your creditworthiness. You must maintain a high credit score all the time to get the best offer on loan or credit card. For CIBIL score calculation, certain things are considered, i.e. your payment history, credit exposure, credit type and duration, and other factors.


How is Your CIBIL Score Calculated?

A CIBIL Score is calculated by the TransUnion CIBIL credit bureau considering several factors, such as borrower’s payment history, exposure to credit, type and duration of credit, and other factors. Each factor has its own weightage (as mentioned below) when it comes to credit score calculation. Here's a breakdown of the four primary components:

ComponentPercentage InfluenceExplanation
Payment History35%The most significant factor. It reflects your consistency in repaying past and current loans and credit card bills. Timely payments positively impact your score, while defaults, delays, or missed payments can significantly lower it.
Credit Utilization Ratio30%Measures the amount of credit you're using compared to your total available credit limit. A high utilization ratio suggests potential over-reliance on credit. Maintaining a ratio under 30% is generally seen as favorable.
Length of Credit History15%This takes into account how long you've been using credit. Older credit accounts, if managed well, can be beneficial for your score as they showcase a longer history of credit management.
Type and Number of Credit Accounts20%A mix of secured (e.g., home or auto loans) and unsecured (e.g., credit cards or personal loans) credit is favorable. Too many loan applications in a short span can negatively affect your score, as it may indicate a credit hungry behaviour by the borrower.

Also Check: HDFC CIBIL Score


Also Check: Equifax Credit Score

Basics of CIBIL Score

  • CIBIL score is a 3-digit number and is a summary of your credit rating, history, and report.
  • CIBIL score is calculated by TransUnion CIBIL based on  your payment history, credit exposure, credit type and duration, and other factors.
  • It ranges from 300 to 900. 
  • The closer score to 900 has better chances of getting a credit approval.
  • It takes time to build a CIBIL score and it usually takes borrowers to have a credit usage of 18 and 36 months or more to obtain a satisfactory credit score.
  • You can improve your CIBIL score by repaying your credit card bills on time, not missing your loan EMIs, never defaulting on debts, and using your credit wisely.
  • A score of “NA” or “NH” means you do not have any credit history/ you do not have enough credit history to be scored/ you are new to the credit system/ you don’t have any credit activity in the past couple of years/ you have add-on credit cards and no credit exposure.

Additional Reading: Experian credit score


Common Factors on Which CIBIL Score Calculation Depends

The four common factors that are considered to calculate CIBIL score online or offline are mentioned below:

  • Payment history: Your payment history of past credits is a vital factor that can affect your CIBIL score in a positive or negative way. Paying off your outstanding credit card bills and loan EMIs on time will boost your credit score. If you delay or miss your payments, it will decrease your score. Hence, avoid delaying or defaulting your payments to keep your score high. According to an analysis by the Financial Express, a delinquency of 30 days can lower your CIBIL score by 100 points.  
  • Exposure to credit: Credit exposure, also known as the credit utilizaiton ratio (CUR), is another crucial factor considered to calculate credit score. CUR is the amount of credit you have used in proportion to the credit limit available to you. According to financial experts, a person should not use more than 30% of their total credit card limit. A high CUR means the borrower is credit hungry and is struggling with their finances. A heavy credit usage could make lenders think that you are a high risk borrower and can turn into a defaulter. This may lead to application rejection or higher interest rate on loan. 
  • Duration and type of credit: Credit history is the number of years for which you have opened the first credit account. If you have a long credit history, it shows that you are experienced in handling credit. It is advised to build your credit history from an early stage as it is helpful when you plan to apply for a high amount loan in the future. Lenders also consider the type of credit when calculating your CIBIL score. Hence, it is crucial to maintain a healthy balance of secured loans (like home, loan, car loan, etc.) and unsecured loans (like credit card, personal loans, etc.). Having a mix of secured as well as unsecured credits in your CIBIL report suggests that you can handle both types of credit. 
  • Hard inquiry: When you apply for a loan or a credit card, lenders will extract your CIBIL report from the credit bureau. Such inquiries are called hard inquiries and multiple hard inquiries will have a negative impact on your credit score. Hence, avoid applying for multiple credit lines at the same time.

Additional Reading: Top Credit Rating Agencies in India

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Additional Reading: CIBIL Score Meaning

What is the Ideal CIBIL Score You Should Have?

The ideal CIBIL score varies for different types of credits as well as borrowers. The CIBIL score requirement for secured loans is usually lesser than that for unsecured loans. Also, CIBIL score required for salaried borrowers can be lower than self-employed applicants. Below is the range of CIBIL score and its meaning: 

  • 750 to 900: A credit score in this range shows that the borrower has an exemplary credit history and it is easier for them to get a personal loan, home loan, credit cards and other forms of unsecured loans with such a credit score. 
  • 700 to 750: Having a CIBIL score in this range means that you have a good track record of making your repayments on time. However, lenders will conduct further credit analysis based on their internal credit policies. This credit score range is good for secured loans. 
  • 550 to 700: This range means that you have some irregularities with your previous credit repayments. Lenders may consider you a little risky to sanction a loan. However, a few banks may still consider you eligible for a loan, but you might be asked to provide a high collateral and can be charged a high interest rate. 
  • 300 to 550: A credit score within this range means that a borrower has a lot of defaults, such as past delinquencies, over leverage, and write offs. Such borrowers will find it difficult to get a loan.

Additional Reading: CRIF credit score?

What is the Ideal CIBIL Score for Different Types of Loans?

The ideal CIBIL score can vary slightly among lenders based on their risk appetite and the specific loan product. However, a higher score always increases the likelihood of loan approval and getting better terms. Below is a general guideline for the ideal CIBIL score for different types of loans:

LoanIdeal CIBIL Score
Home Loan750 and above
Personal Loan750 and above
Car/Auto Loan740 and above
Education Loan730 and above
Credit Card750 and above
Loan Against Property750 and above

While these scores are considered ideal, it's possible to get approval with slightly lower scores as well, albeit potentially at less favorable terms or higher interest rates. It's essential to note that other factors, such as income, job stability, existing liabilities, and more, also play significant roles in loan approvals.

How to Calculate CIBIL Score for Personal Loan?

You can use CIBIL Calculator to calculate CIBIL score for personal loan. You can also visit the official website of CIBIL to check free CIBIL Score.

  • Fill a form on the official website of CIBIL.
  • Enter the required personal details, including your name, address, and contact number.
  • You need to pay a nominal fee to get the CIBIL TransUnion score.
  • After submitting the form and making the payment, you get your CIBIL score and report on your email. 
  • You can also get your CIBIL score offline by mailing all the required documents along with a demand draft to the Mumbai office of CIBIL.

Also Read : CIBIL Dispute

How to Calculate CIBIL Score for Home Loan?

The process of calculating your CIBIL score for home loan is the same as for personal loan. You can use the credit score loan calculator available online to get a free credit score and report. You can also get the score online through CIBIL’s website or offline by sending your documents and demand draft to CIBIL’s Mumbai office via mail.

Tip: Check Free Credit Score before applying for a loan

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Also Read : CIBIL Score Check With PAN Card

Credit Score FAQs

What is the difference between CIBIL score and credit score?


The only difference between a CIBIL score and a credit score is that credit score can be provided by any of the four credit bureaus in India, but CIBIL score is provided only by TransUnion CIBIL.

What is the best credit score in CIBIL?


A credit score in the range of 750 to 900 is the best score as it shows that the borrower has an exemplary credit history and it is easier for them to get a personal loan, home loan, credit cards and other forms of unsecured loans with such a credit score.

Is 600 a good CIBIL score?


A CIBIL score of 600 is not considered good as it means that you have some irregularities with your previous credit repayments. Lenders may consider you a little risky to sanction a loan. However, a few banks may still consider you eligible for a loan, but you might be asked to provide a high collateral and can be charged a high interest rate.

Is 650 a good CIBIL score?


650 is a fair CIBIL score. While it's not in the 'poor' range, it might not be considered high enough for some lenders, especially for unsecured loans like personal loans. Applicants with this score might face higher interest rates or more stringent terms.

Is 772 a good CIBIL score?


Yes, 772 is considered a good CIBIL score. Scores above 750 are generally viewed favorably by lenders, increasing the likelihood of loan approval and obtaining favorable interest rates.

Is there any charge to check CIBIL score?


As per RBI mandate, every credit information bureau has to give one free credit report annually and Transunion CIBIL is no exception. However, if you want to check your CIBIL score more than once then you will have to pay around Rs 550 and you will get your report within 3 days of making the payment.

What mistakes can negatively impact your CIBIL score?

  • Late or Missed Payments: Even one missed or late payment on loans or credit cards can adversely affect your score.
  • High Credit Utilization: Regularly using a large portion of your available credit limit can signal credit dependency.
  • Applying for Credit Frequently: Each time you apply for credit, a 'hard inquiry' is recorded. Multiple inquiries in a short time frame can reduce your score.
  • Having Only One Type of Credit: A mix of credit types (secured and unsecured) is favorable. Relying solely on one can affect your score.
  • Defaulting on Loans: This has a major negative impact. It reflects poorly on your creditworthiness.
  • Being a Loan Guarantor for a Defaulted Loan: If you're a guarantor for someone's loan and they default, it impacts your score.
  • Settling a Loan: If you settle a loan (paying less than what you owe), it can reduce your score.
  • Incorrect Information: Errors in your credit report can impact your score. Regularly checking and rectifying errors is crucial.

How credit score is calculated in India?


If you have ever wondered how credit bureaus in India calculate my credit score, here is the answer. Each credit bureau has its own algorithm to calculate credit scores. Credit score is calculated after considering certain factors, such as repayment history, credit utilisation, credit duration, and credit type. 

What should be the CIBIL score for SBI loan?


Applicants should have a credit score of 650 or above to be eligible for SBI personal loans. An applicant with a high credit score has a better chance of getting a low rate of interest on loans and lower processing charges.