What Are the Different Types of Credit Scores

Credit scores measure your creditworthiness, helping lenders assess your ability to repay loans. They are calculated based on factors like payment history, credit utilisation, and credit mix. Understanding the types of credit scores can help you access better credit opportunities on favourable terms.

A credit score is a three-digit number that reflects your creditworthiness and the risk of lending to you. In India, credit scores usually range from 300 to 900. Lenders use your credit score to decide whether to approve your loan or credit card application. 

 

It also affects the interest rates and terms you receive. A higher score shows responsible credit behaviour and increases your chances of getting better credit offers. Regularly check your credit report to maintain a healthy score and correct any errors.

Credit scoring models use unique algorithms to calculate a score by analysing specific financial behaviours. These models help lenders predict the likelihood of default and are a critical component of the credit approval process. Here are the most widely recognised credit-scoring models:

FICO Score

The FICO Score, developed by the Fair Isaac Corporation, is one of the oldest and most widely used credit-scoring models globally. It evaluates a borrower’s creditworthiness based on the following factors:

• Payment History (35%): Tracks how consistently you’ve repaid debts in the past. Timely payments boost your score significantly.

• Credit Utilisation (30%): Measures how much of your available credit you’re using. Keeping this ratio below 30% is ideal.

• Length of Credit History (15%): Reflects how long your credit accounts have been active. Older accounts contribute positively.

• Types of Credit Accounts (10%): Assesses the diversity in your credit mix, such as loans and credit cards. A varied credit portfolio is favourable.

• Recent Credit Inquiries (10%): Consider the frequency of new credit applications. Too many applications in a short period may lower your score.

 

FICO scores range from 300 to 850, with higher scores indicating lower credit risk. They are widely used by banks, mortgage lenders, and credit card companies to evaluate loan eligibility.

Vantage Score

The VantageScore was developed jointly by the three major credit bureaus—Equifax, Experian, and TransUnion—as an alternative to FICO. While it also ranges from 300 to 850, the weightage of each scoring factor differs:

• Payment History (40%): Similar to FICO, timely payments are required to achieve a high credit score 

• Age and Type of Credit (21%): Considers the age of your credit accounts and the diversity of your credit types

• Percentage of Credit Limit Used (20%): Focuses on your credit utilisation ratio

• Total Balances and Debt (11%): Reviews all outstanding debts, including loans and credit card balances

• Recent Credit Behaviour and Inquiries (5%): Evaluates new credit applications

• Available Credit (3%): Takes into account unused credit, which can positively affect your score

 

VantageScore focuses more on credit utilisation and less on payment history compared to FICO. It is becoming increasingly popular due to its predictive accuracy and use of trending data.

India has four major credit bureaus, each offering its own credit scoring model tailored to the Indian financial ecosystem. These credit scores are based on RBI-regulated norms. Here are some of the credit score types:

 

Personal Credit Score

A personal credit score is a key indicator of an individual's creditworthiness. It helps lenders assess how reliably a person is likely to repay borrowed money. This score plays a crucial role in the approval process for personal loan applications and can also influence the interest rates offered. It also impacts decisions related to credit card approvals, making it a vital factor in managing one’s financial profile. Here are the types:

• CIBIL Score

The CIBIL score from TransUnion CIBIL is one of the most widely used credit scores in India, ranging from 300 to 900. It evaluates factors like payment history, credit utilisation, credit mix, and the length of your credit history. A score above 750 is considered excellent and improves your chances of securing loans with favourable terms.

• Equifax Credit Score

Equifax provides credit scores that range from 280 to 850. Its model assesses repayment history, credit utilisation ratio, and credit mix. Lenders use the score to determine credit risk and set loan terms accordingly.

• Experian Credit Score

Experian is another major credit bureau in India, offering scores ranging from 300 to 900. It focuses on payment history, outstanding balances, and recent credit inquiries. Lenders accept Experian scores to evaluate borrower risk and assess loan eligibility.

• CRIF High Mark Credit Score

CRIF High Mark scores range from 300 to 900 and are used for both individual and business credit assessments. The score is calculated using factors like payment patterns, credit history length, and outstanding debts.

Company Credit Score Report

A business credit report, also known as a company credit score report, evaluates a company's creditworthiness and financial health. This helps lenders and stakeholders assess the company’s financial health. Here are the main types:

• CIBIL CCR

The CIBIL Company Credit Report (CCR) is a record of your company's credit history, prepared using data submitted by lending institutions in India to CIBIL. It reflects your company’s credit behaviour and helps lenders evaluate credit risk.

• Experian Business Report

It helps businesses make informed decisions regarding financing, partnerships, and other commercial activities. It offers an evaluation of a company’s creditworthiness and financial health by providing insights into credit history, payment behaviour, financial stability, and risk assessment. 

• CRIF Company Credit Report

A CRIF Company Credit Report (CCR) is a comprehensive document issued by CRIF High Mark, an RBI-regulated credit bureau. It provides insights into a company’s creditworthiness, including its credit history, current credit status, utilisation, payment behaviour, and business credit score, helping lenders assess financial reliability and risk.

• Equifax Commercial Credit Information Report

The Equifax Commercial Credit Information Report helps lenders assess risk and make informed lending decisions. It provides a comprehensive analysis of a business entity’s credit history and financial position. The report covers the company’s credit repayment history, outstanding debts, financial liabilities, and details of associated parties.

Your credit scores reflects your credit behaviour and helps lenders assess your repayment ability. In India, major bureaus like CIBIL (via myCIBIL), Experian (via Experian India), Equifax (via Equifax India), and CRIF High Mark (via the CRIF High Mark website) assign scores typically ranging from 300 to 900. 

 

Here is how to interpret them:

Credit scores are essential, influencing loan approvals and interest rates. Understanding the different types of credit scores and their ranges empowers you to make informed financial decisions. By managing your finances responsibly and regularly monitoring your score, you can enhance your creditworthiness and unlock better economic opportunities.

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CIBIL Transunion Score 2.0	VantageScore	Credit Scoring Models
Equifax vs CIBIL	What is a Credit Bureau	CRIF High Score
Experian Credit Score	CRIF vs CIBIL Score	CreditVision Score
TransUnion CIBIL	Equifax Credit Score	Experian vs CIBIL Score
Experian vs CRIF Score