What is the Difference between Credit Score and CIBIL Score?

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When checking your eligibility for a credit card or loan, you may come across terms like ‘CIBIL score’ and ‘credit score’. Oftentimes, these terms are used interchangeably, even though they are different. The CIBIL score and credit score are terms which are closely related and are used to signify your ability to manage your borrowings. So, what is the difference between credit score and CIBIL score?

What is a CIBIL Score?

A CIBIL score is a type of credit score generated by TransUnion CIBIL. It ranges from 300 to 900, with a higher score indicating stronger creditworthiness. The CIBIL score is calculated based on your credit history, repayment patterns, credit utilisation, and existing credit accounts. It is regarded as a crucial metric for assessing your eligibility for any form of credit.

What is a Credit Score?

A credit score reflects your credit behaviour and is provided by all 4 credit bureaus in India. It is based on factors like your repayment history, credit utilisation, and recent credit inquiries. Each bureau calculates the score slightly differently. It may vary depending on how they weigh these factors. A higher score indicates better credit health. Lenders use your credit score to evaluate your ability to repay loans and decide the terms they can offer you.

Credit Score vs CIBIL Score

Here are some major points that help highlight the difference between a credit score and CIBIL score:

Criteria	CIBIL Score	Credit Score
Issuer	Exclusively provided by TransUnion CIBIL	Offered by various credit bureaus like Experian, Equifax, TransUnion CIBIL, and CRIF High Mark
Calculation Method	Calculated using data from banks and financial institutions, with a specific weightage assigned to factors such as repayment history and credit behaviour	Varies by the bureau, as per their proprietary algorithms and unique data sets
Importance	Highly recognised and preferred by most lenders in India for evaluating creditworthiness	The relevance depends on the lender and the bureau providing the score
Score Range	Ranges from 300 to 900	Typically ranges from 300 to 850 or 900, depending on the bureau

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Which one is important – CIBIL or credit Score?

Both, the credit score and CIBIL score are important, but their relevance depends on the context. A CIBIL score is specific to TransUnion CIBIL, a credit bureau in India, and is widely used by lenders to evaluate loan applications. A credit score, on the other hand, is a broader term that refers to scores provided by any credit bureau. For Indian borrowers, the CIBIL score is often prioritised by lenders, making it crucial for accessing financial products.

Are CIBIL scores and credit scores the same thing?

No, there is a major difference between CIBIL and credit scores. A credit score is a generic term representing a numerical measure of creditworthiness, calculated by different credit bureaus based on their methodologies. A CIBIL score is a specific type of credit score generated by TransUnion CIBIL. While all CIBIL scores are credit scores, not all credit scores are CIBIL scores.

Which bureaus provide CIBIL scores and credit scores?

In India, the CIBIL score is provided exclusively by TransUnion CIBIL. Other credit bureaus like Experian, Equifax, and CRIF High Mark also provide credit scores. Each bureau uses its data and algorithms to calculate these scores, but the CIBIL score remains the most widely recognised by lenders.