Credit Score

A credit score or CIBIL score, is a 3-digit numerical score representing your creditworthiness. CIBIL score ranges from 300 – 900, where 900 is the highest. This score indicates how well you manage your credit. You can check your CIBIL score for free with no Impact on credit score. Credit score helps lenders determine whether you will be able to repay the loan in the given tenure or not. Higher the score, higher are your chances of loan or card approval. A credit bureau calculates this credit score depending on your credit history and mix, among other factors. The most common bureau in India is TransUnion CIBIL. Apart from that, CRIF High Mark, Experian and Equifax are a few other bureaus responsible for calculating credit scores in India.

You can check your CIBIL score for free. Follow these steps to check your free credit score:

• Click on Check CIBIL Score.
  
• Enter a few personal details, such as your employment type, name, PAN, mobile number, date of birth and more
• Agree to the terms and conditions.
• Click on 'PROCEED WITH OTP'.
• Enter the OTP sent to your registered mobile number.
• Upon verification of details, you will be able to view your credit score. You will also receive a free credit report.

In a nutshell, your credit score provides a snapshot of your credit health. It indicates the lenders and lets them understand whether you are a responsible borrower or not. Considering these parameters, knowing your credit score is crucial because:

1. It helps you know your credit status

When you receive your credit report, you get to know your standing pertaining to your credit. It is a summary of your past and present credit transactions. By checking this score at regular intervals, you can avoid any discrepancies and work towards improving your score.

2. It makes you eligible for loans

This is yet another importance of credit score. Lenders usually consider a good CIBIL score as one of the primary eligibility factors for loans. In this regard, a credit score of 750 and above is considered ideal. Thus, if you maintain a good credit score, your chances of availing a loan become higher.

*Note that the CIBIL score range in the above-mentioned table is indicative and may vary from one bureau to another.

Click to check more details about different CIBIL Score Range.

There are two types of CIBIL inquiries, namely:

• Hard inquiry

• Soft inquiry

When you check your credit report, it is considered a soft inquiry, whereas when a credit card issuer or a lender checks your credit report, it is called a hard inquiry. Typically, soft inquiries do not hamper your credit score. However, if done over a short span, multiple hard inquiries can significantly hurt your CIBIL score.

The credit score is a common eligibility parameter when you apply for loans. Having said that, when lenders run a credit check, they try to assess what kind of a borrower you are. In this regard, your credit history helps them know how well you have managed loans and credit cards in the past. 

Thus, irregular debt payments and maxed-out credit cards might pose you as a risky borrower, hampering your creditworthiness.

The RBI provides licences to four credit bureaus to operate in India. They are:

• TransUnion CIBIL

• Experian

• Equifax

• CRIF Highmark