Credit Information Bureau of India or CIBIL is a reliable credit rating agency in India. It has been authorized by the Reserve Bank of India to undertake financial assessment of individual profiles. The agency generates a credit score that is an important component when seeking credit. Lenders closely view the CIBIL score when estimating the creditworthiness of a borrower. The score is a three-digit number that ranges between 300-900. A score in the higher range helps you get the best offerings on credit products. This is why it is imperative to keep a close watch on your CIBIL score from time to time. If you are wondering how the CIBIL score is calculated, here are some important aspects that you must understand. 

CIBIL Score Calculation Method

A CIBIL score takes into account the following factors:

  • A record of your previous payments, precisely, if you have been consistently making payments on time, if you have any delayed payments, if so, how many? All this put a huge impact on your credit score calculation. If you have delayed payments recently, you have a lower probability of getting a loan.

  • Your past settlements, write-offs or any defaults if any. Recent or multiple write-offs may have a negative impact on your CIBIL score calculation. Any delays in repayments on secured loans have a larger impact than unsecured loans.

  • A low loan balance results in a higher score as it indicates low credit usage which is a good sign for your credit score calculation.

  • If you rely on credit cards to get through your daily expenses it may indicate negatively on your credit score. If you make frequent payments on your credit card outstandings this shows you are a low-risk candidate and companies will happily provide you loans.

  • Multiple loan inquiries lead to credit hungry behavior. This will have a negative impact on your credit score calculation.

Although all the above have an impact on your CIBIL score calculation, some are more significant than others:

  1. Payment History - This by far has the highest impact on your Credit Score. About 30% of it is taken into account while calculating your score.

  2. Credit Exposure - 25% of it is taken into account. Credit exposure includes how much debt has been taken in the past.

  3. Credit Type and Duration - About 25% of this is taken into calculations.

  4. Other factors - This makes up 25% of the total factors which can include any miscellaneous reasons which can affect your ability to pay debt in the future.

What is the Ideal CIBIL Score You Should Have

Lenders recommend that a borrower must have a CIBIL score of 750 or above at the time of him or her applying for a loan. However, it must be noted that different CIBIL scores hold different meanings. You can take a look at the below table in order to gain a clearer idea.

Range of CIBIL score

Assigned Grade

What Does it Mean?

750 - 900


Eligible for low rates of interest and there is a high chance that the loan will get approved.

700 - 749


Eligible for getting much more competitive interest rates.

650 - 699


Approval of the credit is possible, but the chances in terms of lenders willing to grant a loan become extremely limited.

600 - 649


The chances of approval of a loan/credit card application become extremely low, and when they do get credit, the borrowers with credit scores that are in this range will have to pay extremely high rates of interest.

Below 600

Immediate Action Required

Approval chances either fall to negligible or zero. In addition, the borrower will be advised to seriously work upon their credit score.

Now, let’s look at the minimum requirements for loan approval based on different CIBIL scores. They can be found in a tabular form below:

Loan Type

Minimum CIBIL Score Requirement

Loan for Personal Uses

700 or Above

Housing/Property/Home Loan

650 or Above

Loan against Property (or LAP)

650 or Above

Automotive Loan

700 or Above

Loan for Business

700 or Above

Loan against Gold or Other Precious Metals

Not Needed

Where can You Check Your CIBIL Score

You can check your CIBIL score by visiting the Finserv MARKETS website and getting your Credit Health Report. One of the major benefits of checking your score on Finserv MARKETS is that it will not have a negative impact as this is a soft inquiry.

FAQs on CIBIL Score

  • ✔️How are CIBIL scores 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.

  • ✔️Is my credit score and my CIBIL score one and the same thing?

    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 will be done so 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.