CIBIL vs Credit Score

CIBIL score and Credit Score are not the same. While they sound similar and are used in the same way, there is a difference between the CIBIL score and credit score. Read on to understand what each term means, how they are related, and why they matter if you're planning to take a loan or apply for a credit card.

Table of Contents:

• ⇾ Difference Between the CIBIL Score and Credit Score
• ⇾ Credit Score
• ⇾ CIBIL Score
• ⇾ Credit Score & Credit Report by Different Bureaus
• ⇾ Improve Your Credit Score
• ⇾ Details on Credit Report or CIBIL Report
• ⇾ Frequently Asked Questions

Difference Between CIBIL Score & Credit Score

Let us look at the difference between the CIBIL Score and Credit Score :

Credit Score

A credit score is a three-digit number that shows how well you manage your loans and credit cards. It helps banks and other lenders decide if they should give you a loan, credit card, or any other form of credit.

The score usually ranges from 300 to 900 in India, and a higher number means you have handled credit well in the past.

This score is calculated by checking your credit history, how much you’ve borrowed, how regularly you’ve paid back, how many credit cards or loans you have, and how much of your credit limit you use. If you make payments on time and don’t take on too much debt, your score stays high.

Credit scores are given by credit bureaus, which are companies that collect and analyze your credit information. In India, the main credit bureaus are CIBIL, Experian, Equifax, and CRIF High Mark.

CIBIL Score

The CIBIL score is a type of credit score given by a company called TransUnion CIBIL.

It is one of the most commonly used credit scores in India. Just like other credit scores, it tells banks how good you are at handling credit, such as personal loans, credit cards, and repayments.

The CIBIL score also ranges between 300 and 900, and a score closer to 900 is better. It is calculated by looking at your past credit activity, like how many loans you’ve taken, how often you repay on time, and how much of your credit limit you use.

Because the CIBIL score is well-known in India, banks and financial companies often check it first when reviewing a loan or credit card application.

Credit Score & Credit Report by Different Bureaus

In India, four main credit bureaus collect and maintain your credit information. These bureaus are responsible for preparing your credit report and giving you a credit score. While all of them serve the same purpose, they are different companies and may use different formulas to calculate your score.

Here’s a look at each one:

1. CIBIL (TransUnion CIBIL):

It is one of the most recognized credit bureaus in India. The term “CIBIL score” specifically refers to the credit score issued by this bureau. It is commonly used by banks and financial institutions to assess eligibility for loans and credit cards

2. Experian:

A global credit bureau that also operates in India. Experian provides both credit reports and credit scores. Some banks prefer to check your Experian score in addition to or instead of your CIBIL score.

3. Equifax:

Another international credit bureau licensed to operate in India. Equifax reports and scores are used mainly by banks and NBFCs (non-banking financial companies) to assess loan applications.

4. CRIF High Mark:

An Indian credit bureau that is gaining popularity, especially among microfinance lenders. It offers credit information reports and scores similar to CIBIL, but specialises in microfinance.

Improve Your Credit Score

You can improve your credit score by paying your loan EMIs and credit card bills on time, keeping your credit card usage low, and not applying for too many loans at once. Check your credit score regularly to spot any errors. If you build a good repayment habit and avoid late payments, your score will slowly go up.

Details on Credit Report or CIBIL Report

A credit report is a detailed record of your credit history. It is prepared by a credit bureau and shows how you’ve handled credit in the past. Your credit score is based on the information in this report.

Here’s what you’ll usually find in a credit report:

• Personal Information: Your name, date of birth, PAN number, and contact details
• Credit Accounts: A list of your loans and credit cards, including the lender’s name, loan amount, and repayment status
• Payment History: Whether you paid on time, made late payments, or missed any EMIs
• Credit Inquiries: A list of banks or lenders who recently checked your credit report
• Credit Score: The 3-digit number (usually between 300 and 900) calculated based on your report