CIBIL Score & Personal Loan

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In our last blog Credit Scored or Scared!?, we met Raj, who wanted a personal loan for his Euro trip, and discussed why his loan application was rejected. In this blog we will try to find out ways to improve Raj’s credit score so that he can take that Eurotrip. After all, we all want Raj to take that Euro trip and meet Simran, right?

 What is a CIBIL Score, anyway?

India has four different Credit information Companies recognised by Reserve Bank of India. Credit Information Bureau India Limited or CIBIL was founded in 2000. Later on in 2010 Experian, Equifax and Highmark were authorized by RBI to work as Credit Information Companies in India. Of these four companies, CIBIL, headquartered in Mumbai, is the most trusted and popular among Indian banks, NBFCs and customers alike.

CIBIL collects and maintains information about individuals’ payments on their loans and credit cards. Different banks and other financial institutions provide CIBIL with these information on monthly basis. Based on the information provided, CIBIL creates two important reports for each borrowing individual or firm- Credit Information Report (CIR) and CIBIL Score.

CIBIL TransUnion Score, or commonly known as CIBIL score, is a score given to each borrower whose records are present with CIBIL. The score ranges from 300 – 900, in the increasing order of credibility. CIBIL requires a minimum of 12 – 18 months of monitoring your payments and transactions before giving you a CIBIL score. Banks highly prefer a CIBIL score of 750 and above.




 300 – 600


Indicates loan defaults, write offs and overdue payments.

 600 – 750


Indicates late or irregular payments on loans and credit cards.

 750 – 900


Consistent payment on loans and ideal credit history.

Once bank has screened borrowers on basis of CIBIL score, it looks into the Credit Information Report of the borrower for his current liabilities, cash outflows and paying capabilities. CIR is an extensive report containing an individual’s personal and financial information under six headings

1)  The first information is of course your CIBIL score.

2)  Personal Information like your name, date of birth, PAN, passport number etc.

3) Your contact information including your present and past addresses and contact numbers.

4) Account information including but not limited to your lenders profile, type of borrowing (car loan, unsecured loan..), account numbers, EMI payments.

5)  Employment information includes nature of your job, employers name and credentials.

6)  Enquiries made by various banks and NBFCs where you applied for loans or credit cards.

Only after the bank is satisfied that the applicant has the capability to undertake new loan, do they accept his loan application.

CIBIL has now come up with a new rating standard called CIBIL TransUnion 2.0 which identifies and scores borrowers with less than 6 months of credit history. Apart from imparting scores to borrowers with regular credit history, it also gives score to borrower with 0 -6 months of credit history. For such borrower scale is 1 – 5. Higher the score less risky the borrower is.

KountMoney would like to share two little secrets with you! One is that although most of the banks follow the CIBIL score pretty much religiously, there are other financial institutions and NBFCs who cater to borrowers with relatively low CIBIL scores. The other one is that not having any loan on you doesn’t ensure a healthy credit score. In fact, it’s just opposite the case. We will discuss more about it in our next blog. For any query kindly write to us @ or visit


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