All You Need to Know about CIBIL Score

The Credit Information Bureau India Limited (CIBIL) is a well-known credit bureau used by most lenders to check someone’s credit score in the country. The credit score is a parameter that helps them determine if you are eligible to get a loan. The Reserve Bank of India (RBI) has made checking the CIBIL score mandatory for all lenders. You can find the score in your CIBIL report, which is a document that details your credit history.

Now that you know the CIBIL score meaning, read on to understand how it can help you get a loan and how to improve it.

Importance of CIBIL score

The CIBIL or credit score is essential for every borrower. If you need a loan, the lenders will only approve the application when you have a high credit score. When you have a good score, it allows you to negotiate a more affordable loan. However, if the score is low, you can take specific steps to improve it before applying for a loan.

How to check your credit score

If you are wondering how to check CIBIL score, follow the eight steps given below:

  1. Visit the official website of CIBIL.
  2. Click ‘Get your CIBIL Score.’
  3. Select ‘Click here.’
  4. Provide your name, contact information, photo ID proof, date of birth, and password.
  5. Select ‘Accept and continue.’
  6. Enter the OTP received on your phone and click ‘Continue.’
  7. Click ‘Go to dashboard’ and you will be redirected to
  8. Select ‘Member Login’ to check your score.

What is a good CIBIL score?

The CIBIL score ranges between 300 and 900. A score between 300 and 599 is not ideal, and it will probably make the lenders reject your loan application. A score between 600 and 749 is not great, but the lenders might still consider your application if you earn a good salary.

The lenders prefer a credit score between 750 and 900. With a score that high, you can confidently approach creditors as they will undoubtedly consider your application as favorable. You may even get quick loan approvals and low interest rates.

The benefits of having a high CIBIL score

A high credit score does not only help you get loan approvals but also offers other advantages as follows:

  • A high credit score gets you the most competitive interest rates.
  • It enables you to get pre-approved loans.
  • A good CIBIL score helps you get a credit card with great rewards and benefits.
  • It encourages the lenders to approve your loan application quickly.
  • A good credit score means you may get a longer repayment tenure.
  • It empowers you to negotiate with the lenders to get a better deal.
  • Higher the credit score, higher will be your credit card limit.

How is the CIBIL score calculated?

Before you learn how to improve your credit score, it is necessary to understand how it is calculated. It comprises four factors, credit history, credit utilization, credit mix and duration, and miscellaneous.

1. Credit history
This makes 30% of your credit score. The credit history is the last three years’ monthly repayment record of your equated monthly installments (EMIs), student loan, car loan, home loan, and others. If you pay all your dues in time, your credit history will be favorable.

2. Credit utilization
This counts for 25% of the score. This is a measurement of how much credit you are regularly using. If you have a credit card with a limit of ₹1 lakh and are using the entire amount every month, that is never a good sign. The lenders might count you as a big spender and doubt your ability to repay the loan in time.

3. Credit mix and duration
This makes 25% of your credit score. Your credit history is made of two types of loans, secured and unsecured. A home loan is a secured loan, and a credit card or personal loan is an unsecured loan. The lenders prefer someone who has a balance of both these types of finance. If you had availed of any of them for a long duration and are paying the dues in time, it enhances your track record.

4. Miscellaneous  
This counts for the remaining 20% of the score. It includes multiple factors such as hard inquiry. If you keep applying for too many loans, the lenders check your credit score repeatedly. This is known as a hard inquiry, which can lead to rejection. Lenders do not prefer customers with too many loans.

How to know the reasons for a low CIBIL score

Make it a habit to check your CIBIL report frequently by visiting their official website. You can get the report for free once a year. The report shows detailed information about your credit score, including if you have defaulted repaying any loan or credit card bills. By thoroughly checking the information, you can get an idea of why your CIBIL score might be low.

Factors affecting your CIBIL score

If you are not sure how to increase the CIBIL score, start by recognizing the factors that negatively affect it. Here is a list of some essential aspects that impact your credit score.

  • Bad repayment behavior: Not paying your loans and credit card bills on time are two main reasons for a low credit score.
  • High credit utilization ratio: High credit utilization ratio is a red flag in your credit history that the lenders cannot ignore. As per experts, you must not use more than 30% of your credit limit to keep your score high.
  • Unpaid debts: The credit report shows all your dues, even if they are small amounts. Debts significantly affect your credit score.
  • Not paying the dues in full: Credit card bills show your minimum amount due along with the total due. If you keep paying only the minimum amount too many times, it leads to a high outstanding balance. This may have a negative impact on your credit report.
  • Unbalanced credit mix: If you do not maintain a balanced mix of secured and unsecured loans, it negatively affects your credit score. If your credit history shows that you have efficiently managed both types of loans, the lenders will favor your loan application.

Tips to improve your CIBIL score

  • Repay loans on time: This is the most effective way to maintain or improve your credit score. If your score is low, start paying the dues immediately and ensure not to miss any deadline. It generally takes six to eight months to improve the score with this method.  
  • Check the CIBIL report for errors: If you want to know how to improve the CIBIL score immediately, check the report carefully. It can have errors that lower your score. By rectifying them, you can quickly fix the credit score.
  • Recheck closed loans: Sometimes, closed loans can appear as “written off” on the CIBIL report. And this will lower your credit score. Wondering how to increase credit score in that case? Ensure all your repaid loans are mentioned as closed. In the case of discrepancies, contact CIBIL immediately.


1.  Does having more unsecured loans affect credit score?
Unsecured loans like credit cards or personal loans have a high interest rate, which means there is a high chance of defaulting. Lenders try to avoid that risk. Thus, it is advisable to avail of secure and unsecured loans to maintain a good credit score.

2. Is applying for too many loans bad?
If you want to improve your CIBIL score, avoid applying for too many loans at once. It lowers your credit score, making it difficult for lenders to evaluate your application.

3. Can credit cards help improve the CIBIL score?
If you want to improve your score by repaying debts quickly, credit cards can help more than loans. Regular, on-time payments of credit card bills help improve credit score.

Understanding how to improve the CIBIL score is only the first step. If you do not have any credit history, apply for a secured credit card to build a strong credit report. And if you have any existing loans, manage them efficiently to always maintain a good credit score.

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