Cibil Consultants In Bangalore


Cibil Score Calculation

What is CIBIL score?

A CIBIL score is detailed credit history and credit worthiness of a person.  Based on this history CIBIL will give you the score from 300 to 900. Higher the CIBIL score will be better for getting approval of your housing loan, car loan, personal loan or credit card. Also without knowing your credit history if you apply many times for loans or credit cards then your score will decline!!!

How is the CIBIL score calculated?

While each credit information company has its own proprietary algorithm to calculate an individual’s credit score, the most important elements of the score composition are centric around the loan payment behaviour of the individual. Your CIBIL Score is calculated based on the information in the “Accounts” and “Enquiry” section of your CIBIL Report. CIBIL scores are calculated based on various factors such as your payment history of loans and credit cards, number and type of loan and credit card accounts, length of your credit history, outstanding debt and many other factors. Some are the Key Factors:

Key Factors That Determine Cibil Score Calculation

  • Credit History (30%)
  • Utilization of Credit (25%)
  • Duration, Type And Defaults (25%)
  • Credit Enquiry (20%)
    Past Credit Performance (30%) The most important factor in determining one’s CIBIL score is an individual’s past credit performance is accounting for 30% weightage. The record of credit borrowed by an individual and the history of behaviour in repayment of credit is what is considered in this section. If one has made payments on time and in full balance, they would score well in this section.   Credit Utilization (25%) Utilization of Credit accounts for 25% weightage in CIBIL score calculation. Credit utilization is the amount of credit borrowed as a percentage of total credit limit. For example, if one has a credit limit of Rs. 1,00,000 and they have Rs. 60,000 of limit in usage, their credit utilization will be at 60%. A lower credit utilization score has a lesser perceived risk is from a bank’s perspective. If an individual does increase their credit utilization periodically, then their credit score is negatively impacted. It’s favourable for an individual to have a decreasing credit utilization.   Credit Duration, Types And Defaults (25%) The type and duration of credit account for 25% weightage in CIBIL score calculation. Credit Duration is the time period from the approval of one’s first credit disbursement to date. A longer credit history is looked at more favourably by CIBIL because it gives them more data for analysis of risk. The type of loan (secured or unsecured) availed also contributes towards a higher score. Secured loans (car loans and home loans) are secured by way of collateral. Unsecured loans (credit cards and personal loans) are not backed by way of collateral. Unsecured loans negatively impact a score when compared to secured loans even if the payments for both the loans are made on time. Defaulting on any loan payment (principal or interest) will negatively impact an individual’s credit score. Accounts in collection, bankruptcies, liens and foreclosures take 7-10 years to rectify in one’s CIBIL score.   Credit Enquiry (20%) The number of times an individual has made a credit enquiry accounts for 20% weightage in CIBIL score calculation. A credit report contains an enquiry section that displays the number of times a credit enquiry was made in each time period. More credit enquiries/applications in short time spans may make the individual be deemed as being credit hungry. Similarly, multiple credit rejections will increase perceived risk. Hence, it is not advisable to apply for several credit lines during a short time span.  

Where Does The Cibil Score Have Influence?

  Credit approvals   “Are you a reliable candidate who will pay back what you are going to borrow?” is the first thing the lenders would want to know. With your score and your CIR, the banks will be able to easily access your credit worthiness and can approve or deny your application.   Approval for housing loan   A good CIBIL score will ensure that you get approved for a new housing loan. A good CIBIL score can help you acquire a loan of up to 85% of the total cost of the property.   Other factors   CIBIL scores not only affect your ability to get favourable loans and good interest rates but they will also help you in getting approved for a new cell phone plan or insurance cover with lesser premiums.    

Where Cibil Scores Do not Have Influence?

When you have never used any credit instrument like a credit card or have never taken a loan of any kind, you have no credit and repayment history. In such a case, you will get an NA score. If you belong to this category, you can look for agencies specialising in credit profiling first time borrowers. CIBIL scores play a pivotal role in your financial journey. Responsible use of credit, making payments on time and having an optimum number of loans and credit cards will ensure a good CIBIL score, thus, ensuring a smooth financial journey.


CIBIL ratings are becoming increasingly prominent in our financial system. While member institutions, currently, largely comprise banks and credit card issuers and other financial institutions extending credit, it is likely that insurance companies and telecom companies may soon join the fray. CIBIL score is the deciding factor for many banks when considering one’s loan application. The higher the score, greater are the chances that one’s loan application will be reviewed and approved. So, there arise a requirement to consider CIBIL Score for the existing as well as the new customers of a bank or any other financial institute in order to ensure security by allowing them to get a complete picture of the payment history of the credit applicant or to analyse his/her behaviour as an employee, which would help them in loan approval process and also minimize the chances of fraud cases. However, the approval of one’s loan application is completely dependent on bank. CIBIL as an institution does not play any role here. It is advisable to maintain a good credit history as it is the most important financial report that can help a person to avail loans without any difficulty.

FAQs On Cibil Score Calculations


What is a CIBIL score, and how is it calculated?

Credit scoring is done through a complex statistical and mathematical model. In India, three top firms which provide these kind of credit scores are Experian, Equifax and Central Information Bureau of (India) Limited - TransUnion CIBIL. As this is the biggest provider of credit scores in India, credit scores are commonly referred to as CIBIL scores. It rates the creditworthiness of individuals on a scale of 300 - 900.

How the credit scores are calculated?

This process can be split off into two parts -

1.) Information Collection- A borrower past credit history, social background information, EMIs paid, delays in payment, past credit behavior, reasons for taking loans, repayment history, credit card usage and information on numerous other parameters is collected.

2.)Credit Scoring Model - The above listed financial information and social parameters are gathered and assimilated. It is then fed into a complex statistical proprietary model. This algorithmic model has weights assigned to each of these components. Also, the model performs calculations based on some standard assumptions and predefined variables. Once these calculations are done, the model arrives at a final credit score in the range of 300 to 900.

These scores are then tabulated and presented in the form of a report.

Know More About Cibil Credit Score :


  1. Good CIBIL Score for Personal Loan


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