Understand the key factors behind how credit score is calculated in India. Know the CIBIL score calculation, exclusions, who calculates it, how to verify your report, and other key
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A CIBIL score is calculated using a proprietary algorithm based on factors like payment history, credit utilisation, credit history length, and credit mix, with payment history and credit utilisation having the most significant impact. Your score is a three-digit number between 300 and 900, with a higher score indicating better creditworthiness.
The information that the credit bureau bases your CIBIL score on is sourced from banking and financial institutions. Below is an approximate weightage percentage that is assigned to each and every aspect of your credit behaviour:
Factor |
Weightage |
What it measures |
Payment History |
35% |
On-time payments of EMIs and credit card bills. |
Credit Utilisation |
30% |
The ratio of your used credit to your total available credit limit. |
Length of Credit History |
15% |
How long your credit accounts have been active. |
Credit Mix |
10% |
The variety of credit you use, such as a mix of secured and unsecured loans. |
New Credit / Inquiries |
10% |
The number of new credit accounts you have opened and hard inquiries on your credit report. |
Note: This chart offers an approximate view based on other credit scoring models like VantageScore and FICO and should not be taken as the exact CIBIL scoring formula. The actual scoring mechanism used by TransUnion CIBIL is proprietary and may differ in undisclosed ways.
Once TransUnion CIBIL has taken all of the aforementioned factors into account, they will calculate your CIBIL score on the basis of how you have performed in all of the areas and the weightage assigned.
There isn’t a single, public CIBIL Score calculation formula that tells you, step-by-step, how your score is computed. Instead, the score is derived from multiple behaviours reflected in your credit report. Below are the key factors that commonly influence your score and how to manage each of them effectively.
Repayment History
Repayment history is the backbone of your credit profile because it answers lenders’ most crucial query — whether you pay on time or not. Every EMI and credit-card due date is a data point. Consistent on-time payments signal reliability, while late or missed payments can significantly dent your score and stay visible for years.
Even one serious delinquency can outweigh months of good behaviour. To avoid this, you can automate payments, maintain sufficient balances before due dates, and promptly resolve any disputes with lenders so incorrect late marks don’t linger. If you’ve slipped, build a positive streak—recent, continuous on-time payments gradually repair earlier damage.
Credit Utilisation Ratio
Your credit utilisation ratio is the share of your available revolving credit (like credit cards or overdrafts) that you actually use. High utilisation suggests dependency on credit and a tighter cash flow, which lenders view as riskier. As a simple rule of thumb, try to keep utilisation below 30–40% on each card and across all cards combined.
You can make multiple small payments throughout the month, before the statement date, or ask for occasional limit increases, if your income and discipline support it. Try to spread purchases across cards to avoid spiking one account and always avoid maxing out limits even if you pay in full. Lower utilisation signals prudent borrowing and can lift your score.
Credit Mix
Credit mix refers to the balance between secured credit (home/auto loans backed by collateral) and unsecured credit (credit cards, personal loans, business loans without collateral). A healthy mix shows you can manage different obligation types over time. If your profile is dominated by unsecured loans and cards, your risk profile can appear higher, even with timely payment.
Conversely, only having one type of loan can offer lenders a limited view of your behaviour. You don’t need to chase loans you don’t need; rather, avoid over-reliance on unsecured credit. Instead, maintain long-standing accounts in good standing, and let a natural blend of credit products reflect stable, diversified borrowing habits.
Active Credit Lines
Active credit lines are the open accounts in your name—every credit card and loan currently running. Too many concurrent accounts can indicate credit dependency, increase the chance of missed payments, and make your finances harder to manage. If your report shows seven or more active lines, some lenders might grow cautious.
So, try to streamline where sensible. Consolidate high-cost unsecured debt into a single, structured loan if it reduces your EMI burden and simplifies tracking. Close truly redundant cards after considering the impact on your utilisation and account age. Find a balance with enough lines to meet your needs and build history, while avoiding complexity or risk.
Number of Hard Inquiries
Each time you apply for a loan or card, the lender typically performs a ‘hard inquiry’, which is recorded on your report. A cluster of inquiries in a short span can make you look credit-hungry and may nudge your score downward—especially if applications are rejected. So, applying strategically can help you avoid this drop.
Research eligibility first, use pre-qualification tools where available, and space out applications. If you’re rate-shopping for a single loan type, doing it within a short window can make it clear that you’re comparing options, not seeking multiple new debts. Over time, fewer, well-timed inquiries combined with strong repayment behaviour help preserve and improve your score.
Age of Credit History
The age of your credit history shows how long you’ve been responsibly handling credit. Lenders prefer a deeper track record because it smooths out short-term blips and demonstrates behaviour across cycles. The two metrics that tend to matter the most are the age of your oldest account and your average account age.
Closing long-standing cards or frequently opening new ones can shrink these figures and subtly drag your score. If an old card has no fees, consider keeping it open and using it occasionally to keep it active. Over time, a steady, well-aged profile—anchored by long-tenure accounts with clean repayment—strengthens your credibility and supports a higher score.
In India, the CIBIL score is provided by TransUnion CIBIL Ltd., previously known as the Credit Information Bureau (India) Limited (CIBIL). It is one of the four major Credit Information Companies (CIC) in India licensed by the Reserve Bank of India. These credit bureaus collect and maintain credit data from lenders. Using these, they generate credit reports and scores, which are used by financial institutions to assess a borrower's creditworthiness.
Major Credit Score Providers in India
TransUnion CIBIL: This is India's first credit bureau, and the CIBIL score is one of the most commonly used in the country.
Experian: A global credit information company that provides credit scores in India.
Equifax: Another prominent credit bureau that offers credit reports and scores.
CRIF High Mark: A credit bureau that has gained importance in recent years and provides credit information services.
All these credit bureaus collect information on your loan and credit card repayments from banks and other lenders. They then use this data to generate a credit report and a credit score. However, each credit bureau uses its own algorithm to calculate your score, so your score from each bureau may vary. Lenders use these credit scores to evaluate an applicant's credit history and their ability to repay loans and credit cards.
Your CIBIL Score is built from credit-account data reported by lenders (repayments, limits, delinquencies, enquiries). Many personal or financial details do not enter the scoring model. Here are some of the the common exclusions:
Soft Enquiries and Self-checks
When you check your own score or a lender runs a ‘soft pull’ for pre-qualification, it doesn’t hurt your score. Only ‘hard enquiries’ from actual applications matter.
Income and Employment
Salary, employer name, job title, industry, and length of employment aren’t part of the score. A lender may use them for underwriting, but they don’t raise or lower your CIBIL number.
Savings and investments
Bank balances, fixed deposits, mutual funds, stocks, gold, property, and other assets aren’t tracked in credit bureaus and don’t influence the score.
Debit Transactions
Payments via debit cards, UPI/Wallets, or cash don’t create credit lines and aren’t reported as credit behaviour. They don’t affect your score unless tied to a credit account.
Personal Demographics
Age, gender, marital status, education, religion, caste, and nationality are not scoring factors. The model evaluates credit behaviour, not identity.
Other Financial Activities
Mobile, electricity, broadband, rent, OTT payments, and non-traditional loans from private lenders are not part of the calculation.
Non-credit Disputes and Legal Matters
Civil/criminal cases, traffic fines, and non-credit disputes aren’t part of the score unless they lead to credit-account reporting (e.g., a loan default).
Geography and Address
Your city, pin code, or how often you move doesn’t change the score. Address is used for identification, not scoring.
To know if your credit score is correct, review your detailed credit report for accuracy and compare the information to your personal financial history. Check for errors in your personal information, account status, or payment history. Here are the steps to verify your credit score:
Check your Credit Report: Obtain your free credit report from the official TransUnion CIBIL website or through other financial platforms like Bajaj Markets.
Review for Accuracy: Carefully check all sections of your report, including:
Personal information: Name, address, date of birth, and other details.
Account information: All credit accounts (open and closed), and their balances.
Payment history: A summary of on-time payments and any missed payments.
Inquiries: A list of all recent credit inquiries.
Check for Errors: Compare the information on the report with your records. For example, verify that a late payment was not incorrectly reported, or that a closed account is listed as closed and not still open.
Dispute Errors: If you find any inaccuracies, you can raise a dispute with CIBIL on the credit bureau's official website to report the error. Also ask the lender to update the bureau. Once the underlying data is corrected, your score should align in the next cycle.
Review Scoring Factors: Know that your score is calculated based on factors like payment history, credit utilisation, length of your credit history, types of credit used, and new credit inquiries. Reviewing your report can help you see how these factors are affecting your score.
Understand NA/NH Cases: If you’re new to credit or inactive, you may see NA/NH instead of a score. This usually means that there is no history or at least insufficient data to provide a score, and not a calculation error.
Monitor your Score: Check your CIBIL score regularly to track its changes and ensure its accuracy over time.
Checking your CIBIL score is quick and instant through websites like Bajaj Markets. Here is the step-by-step guide to check your credit score using your PAN Card:
Click on the ‘Get Score Now’ option on this page
Enter a few personal details, such as
Name
Personal email ID
PAN details
Residential pincode
Date of birth
Mobile number
Select your employment type from the options provided in dropdown menu
Tick the consent box
It is important to know about everything related to your CIBIL score as it plays a much more important role in your loan or credit card approval than you think when you apply for one. Bajaj Markets has a wealth of information about how credit bureaus like CIBIL assess your creditworthiness and how you can improve the same to increase your credit approval chances.
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FAQs on CIBIL Score Calculation
How is CIBIL score calculated?
A credit bureau calculates an individual’s CIBIL score after taking several factors into account. These factors are the likes of an individual’s loan repayment behaviour, credit card management and credit utilisation ratio, among others. After the relevant agencies have done their due diligence, they assign a three-digit numerical figure to the borrower. This figure is a part of the borrowers’ credit information report (CIR) that bureaus make after collating all of the borrower’s credit behaviour-related data and adding it to a single report.
What can affect my CIBIL score calculation negatively?
Some of the things that can affect your CIBIL score negatively is non-timely repayment of your debt, a high credit utilisation ratio and a high number of inquiries made by lending institutions about you. So, in order to prevent your CIBIL score from falling, you must repay your debts timely, use less than 30% of the credit available to you and avoid sending out too many credit card/loan applications over a short span of time.
Why is my CIBIL score different from scores assigned by other credit bureaus?
The primary reason why your CIBIL score can be different from scores issued by other credit bureaus is that although every credit bureau calculates individual credit scores in a similar way, every one of them adds a different weightage to different aspects of your credit history. Additionally, another reason why your CIBIL score may differ from scores produced by other credit bureaus is that others may not have received updated information from the lender yet.
Is a CIBIL score and a credit score the same?
Although considered to be synonymous, Credit Scores and CIBIL scores are not exactly one and the same thing. CIBIL scores are credit scores, but this particular figure is only published by Credit Information Bureau of India Limited (CIBIL). Credit score, on the other hand, is a general term used for similar looking three-digit-long numerical figures that are published by other Indian credit bureaus. Other bureaus that assign and publish credit scores to Indian borrowers are Equifax, Experian and CRIF Highmark.
How can I check my CIBIL score online for no cost?
You can check your CIBIL score online for free once every year by simply logging on to the CIBIL website and making a User ID. During the registration process, you will be asked to take a subscription plan, but since you want to check your CIBIL report just once, you can skip that part and proceed. After you have done so, you can check your free annual CIBIL-issued credit information report that will have your CIBIL score too.
What is the best CIBIL score for me to get a loan?
The ideal CIBIL score for securing any kind of loan is 750 or above. Some lenders can also grant you loans if your CIBIL score is in the range of 650-750, but they can usually be at a high interest rate.
Will a loan rejection affect my CIBIL score?
Loan rejections do not affect CIBIL score at all as a loan can be rejected for reasons other than your loan repayment capability and overall risk profile.
Is salary considered while calculating a credit score?
No, salary is not directly used to calculate a credit score, as the score is based on your credit behavior like payment history and debt, not income. While income isn't a direct factor for the score, a higher income can help you manage debt, make timely payments, and can be considered by lenders when you apply for a loan, which indirectly impacts your financial health and ability to build good credit.
