CIBIL Score

A credit score is a 3-digit numerical score representing your creditworthiness. This score indicates how well you manage your credit. It is offered by the four official credit bureaus of India - Equifax, CRIF High Mark, Experian, and TransUnion CIBIL. Each of these calculates your scores on the basis of your repayment history, existing credit accounts, and so on. However, the computation method, score ranges, etc., usually differ from one bureau to another.

 

The score generated by TransUnion CIBIL is one of the most widely used scores in India. The CIBIL score ranges from 300 – 900, where 900 is the highest. Usually, a score of 750 or more is considered to be ideal.

You can check your CIBIL score for free through a simple and quick digital process on Bajaj Markets. The higher the score, the higher your chances of loan or card approval. It helps lenders determine whether you will be able to repay the loan in the given tenure or not. For a quick and easy check, access your CIBIL score by clicking on the ‘Get Your CIBIL Score’ option on this page. You can also get access to a Credit Report through the Bajaj Markets App.

Follow these steps to check your CIBIL score for free:

• Click on the ‘Get Your CIBIL Score’ option on this page

• Enter a few personal details, such as your name, mobile number, date of birth, e-mail ID, PAN details, and residential pincode

• Select your employment type from the options provided

• Agree to the terms and conditions

• Click on 'GET REPORT'

• Enter the OTP sent to your registered mobile number and click on ‘SUBMIT’

• On verification of details, you will be able to view your CIBIL score

 

For better surveillance of your credit score, consider checking your report often. On the Bajaj Markets App, you can easily access a customised report. It offers a detailed view of your credit cards, loans, and personalised tips to improve your score. 

 

Additionally, it includes tailored financial offers based on your credit profile. The app includes widgets like 'DID YOU KNOW' and 'IMPROVE YOUR SCORE.' These provide you with insights to help you manage your credit score better.

Here is how different factors that impact your score are then graded based on some simple formulas and calculations. This is used to calculate your overall CIBIL score:

Credit Enquiries

A limited number of credit enquiries helps keep your score high, showing lenders you're mindful of your credit activity. This is usually denoted as good, fair, or poor, depending on the number of credit enquiries undertaken over a specific period. The more infrequent your enquiries, the lower the impact on your score. Here’s a detailed overview of the same for your use:

Repayment History

Timely repayments have a positive impact, demonstrating your reliability and boosting your score. The sooner you pay your outstanding dues, the better it is for your credit history. This is represented in the form of a percentage, calculated by using the following formula:

 

Percentage = Your missed payments / your total payments x 100

 

The percentage is then categorised as ‘Good’, ‘Fair’, and ‘Poor’:

• Good: Below 15%

• Fair: 15% to 50%

• Poor: Above 50%

Length of Credit History

The longer your credit history, the better your score can be. This is because it highlights your experience in managing credit. If your oldest account is more than 48 months old, the length of your credit history is considered ‘Good’. If it falls between 24 to 48 months, it is ‘Fair’. However, if it is under 24 months, it is termed ‘Poor’.

Credit Mix

A healthy balance of credit types can improve your score, showcasing your ability to manage different kinds of credit smoothly. This is calculated as a percentage by using the following formula:

 

Percentage = Count of secured accounts / count of total tradelines 

 

Next, the percentage is categorised as ‘Poor’, ‘Fair’, and ‘Good:

• Good: 25% or above

• Fair: 5% to 24.99%

• Poor: Below 5%

Credit Limit Utilisation

It is the percentage of the credit limit that you use every month. Ideally, you should not use more than 30% of your credit card's limit to maintain a healthy CIBIL score. This percentage can be calculated with the help of a simple formula:

 

Credit utilisation ratio = Utilised credit limit / total credit limit 

 

This ratio is then categorised as follows:

• Good: 30% and above

• Fair: 30% to 70%

• Poor: Below 70%

Lenders check your CIBIL score to gauge your creditworthiness and assess the risk of extending credit. As per the official website of TransUnion CIBIL, over 79% of loans are approved for individuals with a CIBIL score above 750, as it reflects responsible credit management. A high CIBIL score not only increases your chances of approval but may also lead to better loan terms, such as lower interest rates or higher loan limits. On the other hand, a score below 600 is often considered risky, leading to rejections or loans with stricter conditions and higher interest rates.

Take a look at CIBIL score ranges:

Maintaining a healthy CIBIL score is beneficial for borrowers due to the following reasons:

•  A good CIBIL score often leads to lenders offering higher credit limits on credit cards and loans, as it demonstrates your ability to manage larger amounts of credit responsibly.
  

• With a strong credit score, lenders can expedite the loan approval process since you are perceived as a lower risk. This can be particularly beneficial for urgent financial needs.
  

• A high CIBIL score gives you leverage to negotiate better loan terms, such as flexible repayment options or lower processing fees
  

• A good CIBIL score may grant you access to premium financial products. These include higher-tier credit cards with exclusive benefits or loans with added perks like insurance coverage.
  

• If you plan to co-sign a loan for someone else, your high CIBIL score will increase the likelihood of approval and may secure better terms for the primary borrower

Here are several things considered by credit bureaus when computing your CIBIL score:

• Repayment History

Consistently paying your EMIs and credit card bills on time has the biggest impact on your CIBIL score. Missed or late payments lower your score significantly.

• Credit Utilisation Ratio

This is the percentage of your credit limit that you use. A high utilisation ratio (above 30%) signals heavy dependence on credit, which can negatively affect your score.

• Number of Credit Inquiries

Every time you apply for a loan or credit card, the lender checks your credit score, which counts as a hard inquiry. Too many such inquiries in a short span can lower your score.

• Credit Mix

Having a healthy balance of secured loans (like home or auto loans) and unsecured loans (like personal loans or credit cards) improves your score. Relying too much on one type of credit can hurt your rating.

• Length of Credit History

The longer your credit history, the better your score. This includes how long you have held your oldest account and the average age of all your accounts.

• Outstanding Debt

Having a lot of unpaid or high outstanding debt negatively impacts your score. It’s crucial to keep your debt levels low and manageable.

• Loan Settlement or Write-offs

If you have settled a loan for less than the full amount or had a loan written off by the lender, it will be noted in your credit report and lower your score

Your CIBIL score might be low due to various reasons, such as:

• Irregular credit card or loan repayment
  

• Missed EMI payments
  

• Too many unsecured loans
  

• Multiple hard inquiries
  

• The discrepancy in the credit report

If you have a low CIBIL score, here are a few ways through which you can improve it:

• Pay your dues on time
  

• Avoid taking too many loans at the same time
  

• Maintain a good credit mix
  

• Review your credit report at regular intervals
  

• Don't utilise the full extent of your credit limit