CIBIL Score Full Form, Meaning, Registration & Calculation

If you are considering applying for any kind of loan from a financial institution in the foreseeable future, your CIBIL Score will have a lot of bearing to determine if you are a worthy applicant. As a matter of fact, approximately 90% of loan applications are sanctioned for applicants with a CIBIL score of 750 or more. Therefore, it is fair to say that the higher the CIBIL score, the greater is your chance of getting your loan application request approved.

However, before we plunge in-depth to understand how to check your CIBIL Score, let’s get the basics out of the way.

What is the Meaning of CIBIL Score?

Your CIBIL score is a 3 digit number that appears on your credit report. The usual range is between 300 and 900, where 300 is the lowest and 900 is the highest. Generally, a score between 700 and 749 is considered to be good. Having said that, anything over 750 is deemed to be excellent and increases your chances of getting your loan approved. The score itself is dynamic in nature and keeps changing depending on your financial activity.

The CIBIL score is not limited to banks alone to get an understanding of you as a creditworthy applicant. Credit card companies, mortgage lenders, auto lenders, etc. also use it as a snapshot of your creditworthiness prior to approving any credit request.

What is the Full Form of CIBIL?

The CIBIL full form can be expanded into the Credit Information Bureau (India) Limited which is the authorised credit agency by the Reserve Bank of India (RBI) that can calculate the credit score for an individual. The CIBIL meaning is basically a measurement of your creditworthiness by assigning you with a CIBIL score which is a numeric summary used by financial institutions, be it for a loan, advance or credit card application.

What is a CIBIL Report?

For any lender, the CIBIL report is an important document to look into, before approving a loan application. The CIBIL report consists of the borrower’s CIBIL score, credit history, repayment history, personal information, employment details, bank account details, contact information and hard inquiry information. 

By analysing the CIBIL report, a lender determines whether the borrower is creditworthy or not and formulates the terms and conditions of the loan. 

CIBIL report is generated by the company TransUnion CIBIL, a credit bureau, based on the information provided by various lending institutions from where you have taken a loan, including credit card transactions. The lending institutions provide data to TransUnion CIBIL at a regular interval of every 30-45 days.

CIBIL Score Login & Registration Process

Unquestionably, there is a process involved that helps generate your CIBIL score. Follow these steps to initiate your CIBIL score login and registration.

If you are an individual:

• Visit the official website of CIBIL at https://cibil.com
• Simply click on the button that says ‘Get Your CIBIL Score’ button
• Select the subscription plan you need
• Proceed towards your CIBIL login registration by creating your account by filling in your personal details such as name, email address, government ID type, ID number, and mobile number in the first tab of the form
• Click on ‘Accept & Continue’ that helps you to progress to the second part of the online form
• Proceed towards ‘‘Verifying your Identity’
• Move on to the ‘Payment’ section to make payment for your chosen subscription plan
• Upon receipt of payment, you have now successfully registered with the site
• Log in to your account to access the site’s features and generate your CIBIL score

Must Read: How to Check CIBIL Score Online With your PAN Card?

If you are a company:

• Visit the URL https://cibilrank.cibil.com/
• Submit all required information, for example, company name, entity type, ID type, ID value, GSTN value, registered office address, state, city, PIN, and the contact details of the authorised signatory
• Click on the ‘Proceed’ button once you have filled in the details
• Make the payment of Rs.3,000 through debit or credit card or via net banking
• A CIBIL login Registration ID that is unique to you and along with the payment transaction ID is shared with you on your registered email account
• Log in using your unique credentials to access your CIBIL account

Alternatively, you have the option to download the form, fill in all the required details, and send it to their registered email address or postal address.

Calculating Your CIBIL Score

The CIBIL score is calculated taking into account the information that is listed in your credit report. These key parameters are as follows:

Credit History:

Your history of repayments, late payments and defaults on loans and/or credit cards is given the highest priority in your CIBIL score calculation. CIBIL collects and collates all the financial information such as bill payments, EMI compliance and other credit related details every month that is then shared with relevant financial institutions.

Credit Utilisation:

Your current credit utilisation ratio refers to the credit amount that has been used against your total credit limit. Restricting your credit utilisation to approximately 30% of your limit combined with the downward usage trend of your credit utilization helps boost your CIBIL score.

Credit Mix and Duration:

Whilst calculating your CIBIL score calculation, the bureau also runs a check on the type of credit that you have depended on the most. If your debt is of an unsecured nature such as credit cards and personal loans, your CIBIL score will highlight you as a risky borrower. On the other hand, home and car loans which are popular forms of secured loans help to boost your CIBIL score especially if you have made timely payments during the repayment tenure.

Other Factors:

In addition to this, some critical factors that play a role in calculating your CIBIL score include:

• The number of hard enquiries that you have made towards acquiring more credit recently
• The age of your credit
• The types of loans you have taken in the past / are ongoing

Must Read: How to Improve your CIBIL Score?

How can I improve my CIBIL score?

Improving your CIBIL score is critical for gaining access to better credit and lower interest rates. Here are some important steps to improve your creditworthiness:

• Pay your bills, loans, and credit card balances on time. Late payments can have a negative impact on your credit score.
• Keep your credit card balances low. A high credit utilisation rate indicates financial stress.
• Maintain a diverse credit mix to demonstrate your ability to manage various types of credit, such as credit cards, loans, and retail accounts
• Review your credit report on a regular basis for inaccuracies or errors. Dispute and correct any errors with the credit bureau.
• Avoid opening multiple new credit accounts in a short period of time because this can lower your credit score.
• To avoid negative marks on your credit report, settle any overdue or outstanding debts as soon as possible.
• If you are having financial difficulties, seek advice from a credit counselling agency. They can assist you in effectively managing your debt.

Value of CIBIL Score

A CIBIL score is an important financial metric in India that indicates a person's creditworthiness. It is a three-digit number between 300 and 900, with a higher score indicating a better credit profile.

The importance of a high CIBIL score cannot be overstated. It has a direct impact on an individual's ability to obtain credit products such as loans and credit cards, as well as the terms and interest rates offered.

A high CIBIL score indicates responsible financial behaviour, such as on-time bill payments, low credit utilisation, and a diverse credit mix, which makes lenders more willing to lend to you. A low CIBIL score, on the other hand, can limit the accessibility of credit or result in higher interest rates, both of which can be financially burdensome.

Monitoring and maintaining a healthy CIBIL score requires responsible financial habits. A good credit score not only makes credit more accessible, but it also opens the door to better financial opportunities and lower borrowing costs.

Why does the CIBIL score matter?

The CIBIL score is important because it is a key indicator of an individual's creditworthiness in India. Here are some of the main reasons why it is so important:

Access To Credit:

Lenders, including banks and financial institutions, use CIBIL scores to assess applicants' creditworthiness. A higher credit score indicates lower credit risk, making loans and credit cards easier to obtain.

Interest Rates:

A high CIBIL score often translates into lower loan and credit card interest rates. Borrowers with high credit scores are considered less risky, so lenders offer better terms.

Credit Limits

People with high CIBIL scores typically have higher credit limits on their credit cards, giving them more financial flexibility.

Negotiating Power:

A high credit score allows borrowers to negotiate better loan terms.

What does credit history and credit report mean in CIBIL?

A credit history is a comprehensive record of an individual's or a company's financial transactions, including information about borrowing and repayment activities. It includes information about loans, credit cards, and other credit-related transactions, exhibiting whether payments were made on time or if there were any defaults or discrepancies. A positive credit history reflects responsible financial behaviour, whereas a negative one may cause potential lenders to be concerned.

A credit report is a CIBIL document that summarises an individual's or business's credit history. Credit scores, which are numerical representations of creditworthiness, are included. Lenders use these reports and scores to determine the risk of extending credit. A higher credit score usually results in better loan terms, whereas a lower score may result in a higher interest rate or loan rejections.

How to improve your CIBIL score?

Here are some important steps to improve your CIBIL score:

1. Timely Payments:

Make sure that all credit payments, including loans and credit card bills, are made on time. Late payments can have a significant negative impact on your credit score.

2. Reduce Credit Usage:

Try to keep your credit card balances low in comparison to your credit limit. High credit utilisation indicates financial stress, which can lower your credit score.

3. Check Your Credit Report on a Regular Basis:

Examine your credit report for any errors or inconsistencies. Report any errors to the credit bureau so that they can be corrected.

4. Limit New Credit Applications:

Applying for multiple credit accounts in a short period of time can lower your credit score. Only apply for credit when absolutely necessary.

5. Financial Planning:

Make a budget, prioritise debt repayment, and avoid overspending.

Importance of a Good CIBIL Score for Loans

Here are the key reasons why having a high CIBIL score is important:

1. Loan Approval:

Your CIBIL score is used as a primary factor by lenders to determine your creditworthiness. A high score indicates responsible financial behaviour, which increases the chances of loan approval.

2. Favourable Interest Rates:

A good CIBIL score frequently results in lower loan interest rates. Borrowers with higher credit scores are viewed as less risky by lenders, who offer them better terms and save them money over the life of the loan.

3. Higher Loan Amounts:

A high CIBIL score increases your chances of obtaining larger loan amounts, allowing you to meet significant financial needs such as purchasing a home or funding education.

Quick Processing:

A high CIBIL score can speed up the loan application process, cutting down on the time it takes for approval and disbursement.

5. Negotiating Power:

A good credit score gives you the negotiating power to negotiate better terms with lenders, potentially saving you thousands of rupees over the life of the loan.

How to Check Your CIBIL Score Online Step by Step:

Here's how you can check your CIBIL score is:

• Step 1: Navigate to the official CIBIL website.
• Step 2: Choose 'Get your CIBIL Score'.
• Step 3: Enter your name, email address, and password. Include identification proof (passport number, PAN card, Aadhaar or Voter ID). Then enter your PIN code, birth date, and phone number.
• Step 4: Click the 'Accept and continue' button.
• Step 5: You will be sent an OTP to your mobile phone. Enter the OTP and click on the 'Continue' button.
• Step 6: Select 'Go to dashboard' to view your credit score.
• Step 7: You'll be taken to the website myscore.cibil.com.
• Step 8: After clicking 'Member Login,' you will be able to see your CIBIL score.

How Often are CIBIL Reports Updated?

CIBIL reports, like other credit bureau reports, are typically updated monthly. This frequency ensures that the information in the report is current and reflective of your most recent financial activities. The updates cover a wide range of financial aspects, such as credit card usage, loan repayments, new credit inquiries, and any outstanding debts.

The frequency of updates varies slightly between credit bureaus, but it is generally a monthly process. Your credit score is typically refreshed every 30 to 45 days in the case of CIBIL. This regular updating enables lenders and individuals to make informed decisions about credit applications and financial transactions based on the most recent data.

Why is Your Credit Score Low?

A low credit score can be caused by various factors, including:

1. Late Payments:

Missing payment due dates on loans or credit cards on a regular basis can significantly lower your credit score.

2. High Credit Card Balances:

Having a high balance relative to your credit limit can lower your score because it indicates financial strain.

3. Credit Utilisation:

Using a large percentage of your available credit can signal to lenders that you are engaging in high-risk behaviour.

4. Limited Credit History:

A short credit history can result in a lower score because there is less data to evaluate your creditworthiness.

5. Bankruptcy or foreclosure:

Serious negative events, such as bankruptcy or foreclosure, can have long-term consequences for your credit score.

6. Recent Credit Applications:

Having multiple credit inquiries in a short period of time can lower your score, as it may indicate a desperate need of credit.

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Factors that affect your cibil score

Your CIBIL score, also known as your credit score, is a numerical representation of your creditworthiness that is influenced by a number of factors. These are as follows:

1. Payment History:

On-time payment of credit card bills, loan EMIs, and other obligations improves your credit score. Late or missed payments can significantly reduce it.

2. Credit Utilisation:

Your credit score is affected by the percentage of your credit limit that you use. High credit card balances in relation to the limit can harm your credit score.

3. Credit History Length:

A longer credit history is more likely to be viewed favourably. It provides an in-depth analysis of your financial behaviour.

4. New Credit Inquiries:

Applying for multiple credit accounts in a short period of time can lower your credit score because it indicates increased credit risk.

5. Outstanding Debt:

High levels of outstanding debt can negatively impact your score, particularly if it strains your ability to meet financial obligations.

Getting a Personal Loan Basis your CIBIL Score

Your CIBIL score is a significant part of your getting a personal loan. There are other factors that also play a key role in the approval of your loan application.

Before you apply for the personal loan online, make sure that you have your CIBIL score handy. A high CIBIL score, for example, 750 or more, makes you an ideal candidate for any type of loan. With a medium to a good score, your personal loan will have a good chance of getting sanctioned.

On the other hand, a 550 or less CIBIL score for a personal loan may lead to the cancellation of your loan application as you may be considered a ‘high-risk’ candidate. Even if you are offered a personal loan, the interest rates offered may be higher than usual.

How To Apply For Your Personal Loan?

Follow these steps on how to apply for a personal loan online at SMFG India Credit.

1. Check Your Eligibility

Start the process by using a personal loan eligibility checker on the SMFG India Credit website to get an assessment of what you need and if you can avail of the same at all. To avail of a personal loan, make sure you satisfy the following eligibility criteria:

• Be a resident Indian,
• Be at least 18 years at the time of loan application and a maximum of 65 years before the completion of the loan repayment tenure.
• Be employed with a monthly income of at least Rs. 25,000 if living in Delhi or Mumbai and Rs. 20,000 for the rest of the country
• Self-employed professionals are required to meet a certain minimum turnover and yearly profit after tax, which varies depending on the nature of the business / industry.

2. Application

Log on to the SMFG India Credit websiteto submit all the necessary personal and financial information on the application form. Click on the ‘Submit’ button.

An email notification will be sent to your registered email address instantly. Get your paperwork in order and upload soft copies of the same online. Here is a readymade list for your easy reference:

• Identity proof in the form of Passport, Voter ID, Driving License, PAN Card, Aadhaar Card, etc.
• Address proof in the form of Aadhar Card, Driver’s license, Passport, Voter ID, etc.
• Income proof through salary slips or bank statements if salaried or bank statements and profit and loss statements for self-employed individuals or business owners.

3. Verification

Upon submission of the application form and the documents, SMFG India Credit takes some time to verify the information. Meeting all eligibility criteria and a good to high CIBIL score will be the key parameters that will help in SMFG India Credit’s decision-making process for your personal loan application.

4. Loan Sanction

If SMFG India Credit has sanctioned your personal loan, you will receive a 'Sanction Letter’ on your registered email address. Subsequently, a loan agreement will be shared that outlines essential information such as the loan amount, interest rates, tenure of repayment, fees, charges, penalties and general terms and conditions of the personal loan.

5. Disbursal

The personal loan agreement must be signed and emailed back to SMFG India Credit. This helps to put in motion the disbursal formalities. Generally, it takes around 24 business hours* post receipt of the signed agreement for the loan funds to hit the applicant’s bank account.

Final Thoughts

You must make it a habit to check your CIBIL score periodically. This is to give you an idea of how your profile is being perceived by prospective lenders. Monitoring your CIBIL score regularly helps you to build your credit profile.

Having said that, SMFG India Credit eligibility criteria requires personal loan applicants to have at least a 750 CIBIL score at the time of making their loan application. However, if you still have questions, feel free to reach out to our friendly customer service department on the toll free number 1800 103 6001 or email us at [email protected].