How Is Your CIBIL Score Calculated?

A credit score is a numerical representation of your creditworthiness, calculated using data from your credit report. Lenders and other companies use the data to evaluate your creditworthiness to repay loans on time.

How is CIBIL Score Calculated?

Though they may report slightly different information, your credit score is generally based on the same key factors.

Key factors that influence the calculation of CIBIL score are mentioned below:

Payment History (35%)

1. Tracks whether bill payments are done on time.

1. Counts the number of late payments and how late they were.

Amounts Owed (30%)

1. Refers to your credit utilization compared to your available limit.

1. High utilization can negatively impact your score.

Length of Credit History (15%)

1. A longer credit history gives lenders more information about your borrowing behavior.

Credit Mix (10%)

1. Having different types of credit (e.g., credit cards, car loans, mortgages) shows you are capable of managing varied credit responsibilities.

New Credit (10%)

1. Frequent applications for new credit can lower your credit score, thereby signifying financial stress.

1. Lenders may view this as a risk factor.

What is the Ideal CIBIL Score you Should Have?

The details of range of CIBIL score and their meaning are given in the table below:

Ideal CIBIL Score Rating For Different Types of Loans

The CIBIL score rating for different types of loans are listed in the table below:

How to Check CIBIL Score Online?

Here are the steps to check the CIBIL Score online:

Step 1: Visit the official CIBIL website

Step 2: Select ‘Get Your Credit Score’. You can also click on ‘Check my CIBIL score’.

Step 3: Enter the required details, such as email address, password, first name, last name, ID type, ID number, Pincode, and mobile number.

Step 4: Click on ‘Accept and Continue’.

Step 5: Type in your identity proof details

Step 6: Select ‘Proceed to Payment’.

Step 7: Make payment for the same

Step 8: Your CIBIL report and your score will be sent to your email.

Improving Your CIBIL Score

The following are the points that should be remembered to improve your Credit score:

1. Pay on Time
   1. Always make timely bill payments.
   2. Credit score and lender perception are negatively impacted by late or missed payments.
2. Keep Credit Utilization Low
   1. Utilise only a small portion of your available credit.
   2. Credit score gets reduced if credit utilisation is high.
3.  Maintain a Balanced Credit Mix
   1. Aim for a healthy mix of secured loans (e.g., home or auto loans) and unsecured loans (e.g., credit cards or personal loans).
   2. Relying heavily on unsecured credit may be seen as a risk by lenders.
4. Apply for Credit Moderately
   1. Limit the number of new credit applications.
   2. Credit score gets lowered in case of frequent applications as it indicates financial distress or excessive dependency on credit.
5. Monitor Joint and Co-signed Accounts
   1. Stay updated on co-signed, guaranteed, or joint accounts, as you are equally responsible for any missed payments.
   2. A partner's negligence in these accounts can damage your credit profile.
6. Check Your Credit Report Regularly
   1. To catch errors or unauthorized activity, review your CIBIL Score and Report throughout the year.
   2. Raise a dispute on the CIBIL website in case of inaccuracies.

CIBIL Related Articles

1. CIBIL
2. Hidden facts about CIBIL Score
3. CIBIL Myths
4. How Credit Information is important
5. CIBIL Redressal Process
6. Credit Report for Business Loans
7. CIBIL Dispute and Its Resolution

A good credit score can help you secure lower interest rates on loans and credit cards.

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