Credit Score Calculation: What is a CIBIL score and how is it calculated?

Credit Score Calculation: Credit scores are calculated considering a number of factors. The specific formulas may vary depending on the credit bureau and scoring model one is opting for. However, among the common factors are payment history, credit utilisation, types of credit and credit inquiries.

CIBIL Score, also known as Credit Score, is a three-digit numeric summary of a borrower’s credit history. CIBIL or Credit Information Bureau (India) Limited maintains and calculates your credit score. Simply put, it means how well you have managed your finances, like a home loan, personal loan or your credit cards, in the past.

Value of CIBIL Score

The value of Credit Score may range between 300 to 900. 

• Excellent CIBIL Score:  750-900.
• Good CIBIL Score:  650-750
• Average CIBIL Score: 550-650
•  Poor CIBIL Score: 300-500 

How is CIBIL Score calculated?

• The CIBIL Score is derived using the credit history found in the CIBIL Report. 
• It takes into account borrowers’ credit profile over the last 36 months.
• The credit profile includes all kinds of loans such as home loans, credit cards, personal loans, automobile loans, overdraft facilities etc that one has availed and their payment history.

How to check your CIBIL Score online

1) Go to the official CIBIL website.

2) Select 'Get your CIBIL Score’

3) Key in your name, email ID, and password. Attach an ID proof (passport number, PAN card, Aadhaar or Voter ID). Then enter your PIN code, date of birth, and also your phone number

4) Click on 'Accept and continue'

5) You will receive an OTP on your mobile number. 

6) Type in the OTP and select 'Continue'

7) Select 'Go to dashboard' and check your credit score

8) Upon successful verification, you will receive your CIBIL score report for free

How can I improve my CIBIL score?

You can improve your CIBIL Score by maintaining a good credit history.

1) Paying your loan EMIs and credit card bills on time by the due date is most important for maintaining a good credit history and high CIBIL Score.

2) It is better to have a healthy mix of secured (such as home loan, auto loan) and unsecured loans (such as personal loan, credit cards).

3) Monitor your joint accounts monthly.

4) Review you credit history frequently throughout the year.