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What is TransUnion CIBIL Score and How to Check Online?

Published on Apr 29, 2024Updated on May 7, 2024

What is TransUnion CIBIL Score and How to Check Online?

The Transunion CIBIL score summarises an individual’s creditworthiness and repayment history, enabling financial institutions to make informed lending decisions. Generally referred to as a CIBIL score, it is a 3-digit value assigned by TransUnion CIBIL, one of the most popular credit bureaus in India. 

In this article, we will delve into the significance of the TransUnion CIBIL score, how to check it for free, and how much CIBIL score is required for a personal loan. You will also get some tips on improving your CIBIL score.

What is TransUnion CIBIL?

TransUnion CIBIL is one of the 4 major credit bureaus in India. They collect information about your loans, credit cards, and other debts from financial institutions and lenders. This information in turn is used to generate a detailed credit report that reflects your borrowing and payment history. Based on this, a 3-digit score ranging from 300 to 900 is generated. Generally, lenders will look at this score and your credit report to decide whether or not to give you a loan and at what interest rate.

How is the TransUnion CIBIL Score Calculated? 

The main factors that affect CIBIL scores include payment history, credit utilisation ratio, credit mix, and amount of credit inquiries. Let us take a look at these factors in detail.

  1. History of payment: A history of on-time payments of credit card bills and loans can significantly improve your score, while late payments or defaults can bring it down.
  2. Credit utilisation ratio: This ratio is a measure of how much credit you are using against the credit limit available to you. A credit utilisation ratio of 30% or below is ideal for a healthy CIBIL score.
  3. Credit mix: A well-balanced mix of secured and unsecured credit suggests the ability to responsibly handle different types of credit. This can have a positive impact on your score.
  4. Inquiries about new credit: When a borrower applies for credit, a hard inquiry is generated from the lender. Applying for too many credits in a short time can lower your TransUnion CIBIL score slightly.
  5. Along with these, factors such as having open old credit accounts that show a strong payment history can also influence your credit scores.

How to check your TransUnion CIBIL score online for free?

Regularly checking your CIBIL score online will help you catch any drops or errors in your credit report and take steps to rectify the same immediately. If the low score is due to an inaccuracy, you can raise a dispute with CIBIL to get it corrected. If this is not the case, identifying the reason for the drop will help increase your financial awareness and develop responsible credit behaviour over time. 

You can check your TransUnion CIBIL score in 2 ways - on the CIBIL website or through other financial institutions. 

CIBIL website allows you to check your score for free once a year. Here are the general steps to do so:

  • Visit the official website of TransUnion CIBIL.
  • You will find an option similar to ‘Get Your Free CIBIL Score’.
  • Proceed to register with details such as your name, and email address, and set a password.
  • A One-Time Password (OTP) will likely be sent to your registered mobile number.
  • Once you have verified your number, you will be able to access your CIBIL score and view a detailed credit report.

As mentioned before, other financial institutions may also offer a TransUnion CIBIL score free check through their mobile or desktop platforms. You may need to register on the relevant platform and follow similar instructions to check your score.

What is the Significance of the TransUnion CIBIL Score?

A  TransUnion CIBIL score is one of the most important factors a lender considers while approving a loan application. It influences not only the loan approval but also the interest rate you will receive. Different lenders may have different requirements for how much CIBIL score is required for personal loans. However, a score of 750 and above is generally considered favourable to get lower interest rates, provided you meet other eligibility criteria.

How can you Improve your TransUnion CIBIL Score?

Here are some tips that can help you improve your CIBIL score:

  1. Repay credits on time: Make sure that you are paying all bills, including credit card dues, EMIs, and utility bills on time. You can set up payment reminders or use auto-pay facilities so as to not miss important payments. Make sure that you maintain sufficient funds in your account if you are using auto-pay facilities.
  2. Maintain a lower credit utilisation ratio: Try not to spend more than 30% of your credit limit in a month. If your credit limit exceeds 50% or 60%, lenders may be reluctant to give you a loan as this indicates that you are struggling to meet your current financial obligations.
  3. Track your credit history: On a regular basis, monitor credit reports. If you detect any anomalies, take action to get them rectified immediately. 
  4. Avoid applying for too much credit in a short time: Multiple hard inquiries can lower your score and indicate a severe need for credit to the lenders.
  5. Raise your credit limit: The credit utilisation ratio can be considerably reduced by increasing the credit limit, improving your CIBIL score. Upon request, the financial institution can raise the credit limit on your current card. Your credit history and income are just 2 of the many variables that will determine this. Choose which card, if you have more than one, you would like to have your limit raised on.

Conclusion

A strong TransUnion CIBIL score reflects the sound management of previous loans and credit card bills. This increases your creditworthiness in the eyes of financial institutions. You can check your CIBIL score for free once a year on the official CIBIL website. Other financial institutions may offer this facility for free multiple times a year. Regularly checking your CIBIL score will help you rectify any errors and develop responsible credit behaviour over time.  

At SMFG India Credit, the CIBIL score required for a personal loan application is 750 and above. If you meet other eligibility criteria, you stand to get attractive interest rates starting at 11.99% per annum*. Our hassle-free online application portal lets you initiate the process from the comfort of your home. You can get an idea of the highest loan amount you might be eligible to borrow with our personal loan eligibility calculator and plan your finances with our EMI calculator.

* Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us

FAQs

What factors can affect my TransUnion CIBIL score?

There are several factors that can affect your CIBIL score, including payment history, credit utilisation ratio (should ideally be 30% or less), credit mix, and the amount of credit inquiries in a short period.

What is a good TransUnion CIBIL score?

Different lenders may have different criteria for what is considered a “good CIBIL score”. Generally, scores between 700 to 749 are considered to be ‘good’, while scores of 750 and above are seen as ‘excellent’.

What are the names of all the credit card agencies in India?

The 4 main credit card agencies are TransUnion CIBIL, Equifax, Experian, and CRIF Highmark. TransUnion CIBIL is arguably the most popular as the scores generated by this company, referred to as CIBIL scores, are preferred by lending institutions for loan applications.

How often should I check my CIBIL score?

You should check your CIBIL months every 2 to 3 months, especially if you foresee applying for a loan or credit. At the minimum, you should check it once a year.

Does checking my CIBIL score often lower it?

No, you can check your CIBIL score as often as you like without having any negative impact. While applying for a loan or credit generates a hard inquiry from the lender which may temporarily lower your score, checking yourself does not initiate a hard inquiry.

Can a loan rejection affect my CIBIL score?

No, a loan rejection itself does not have a direct impact on CIBIL scores. However, each time you apply for a loan, a hard inquiry is generated which may lower your score for a short while. Therefore, it is recommended not to apply for multiple loans within a short timeframe.

Is it possible to improve my CIBIL score?

Yes, it is definitely possible to improve your CIBIL score by practicing responsible credit behaviour. However, it is important to note that improving CIBIL scores takes time, patience, and consistent effort. Here are some ways to do so:

  • Pay all dues such as credit card bills, loan payments, and utility bills on time and in full.
  • Keep your credit utilisation ratio to 30% or below.
  • Try to avoid applying for multiple credit cards or loans within a short time.
  • Check your CIBIL score and report regularly to spot any errors or activity that may hurt your score.

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