CIBIL Score Range: What is a CIBIL Score and How Does It Affect Your Eligibility?

CIBIL Score Range: What is a CIBIL Score and How Does It Affect Your Eligibility?

Want to know your CIBIL score range before applying for a personal loan or credit card? CIBIL TransUnion score, also known as credit score or credit rating, is a 3-digit number that reflects your credit health. Assigned by the TransUnion CIBIL Limited, this 3-digit rating ranges between 900 and 300. The higher the number, the better it is for the borrower. While 900 is considered as an excellent credit score, 300 is deemed as poor. Lenders use your credit report and credit score as a way to judge your creditworthiness and repayment capability. Leading banks and NBFCs perform credit inquiries among other checks before approving applications.

CIBIL score range – who issues the score and how?

In India, credit rating is issued by the four leading credit agencies such as CIBIL, CRIF High Mark, Experian, and Equifax. The agencies take into data related to various factors such as credit history, credit mix, credit utilization and other factors. Overall, your credit track record determines your rating. Your investments, assets or non-credit financial transactions do not play a part in it. Every credit transaction you make within the formal banking system gets added to your credit history. These may include your EMIs, credit card or loan applications, and information related to the approval or rejection of those applications.

What is a good CIBIL score?

Whether you are planning to take out a loan or apply for a new credit card, you must know if you are eligible. Credit history and credit rating (along with income and repayment capacity) are part of the eligibility criteria. Most lenders perform credit inquiries or credit checks to decide whether or not to approve your application. However, if you want to know it yourself, you can check CIBIL score both online and offline. You need to submit a form and pay a fee for requesting a copy of your CIBIL report. To know whether you have a good credit rating, you must understand how the CIBIL score range works. Here’s a quick breakdown of the scores and what they mean.

1-5 — New borrower:

If you are borrowing for the first time, it is natural for you to not have a credit profile. In such a situation, CIBIL TransUnion will use the numbers from 1 to 5 to classify you on a risk index scale. Here, 1 indicates the highest risk, whereas, 5 denotes the lowest risk.

800-900 — Great:

A score between 800 and 900 is considered “great.” Having this score means you have a spotless credit history and flawless track record. The high score will also inspire lenders to have faith in your repayment abilities. That means you have high chances of getting approval on any loan or credit card application.

600-799 — Good:

If your score is between 600 and 799, you have a good chance of receiving approval from most lenders. This rating shows that you are a safe borrower and have handled your debt payments well. Most traditional lenders prefer a credit score of 750 or above.

300-599 — Bad:

A score within this range is considered as poor or bad. When you have such low CIBIL scores, your chances of getting approval are slim. Paying your credit card bill late, not repaying loans on time or defaulting on payment can result in bad credit rating.

If you have been wondering “what is a good CIBIL score for credit card,” now you know the CIBIL score range that most lenders prefer.

Why does your credit score matter?

Most people do not think about their credit score or credit history until they need to borrow or apply for a financial product. Your financial management skills, spending habits, debt management abilities can contribute your credit score. Here are some of the areas where your CIBIL score plays a crucial role.

Getting a loan:

As mentioned above, your credit rating determines whether or not you will get the approval on your loan application. Most traditional lenders rely on TransUnion CIBIL Limited to conduct a hard credit inquiry. Lenders will only deem you as a “low-risk” borrower with high creditworthiness if your credit history shows a good track record.

Applying for a credit card:

Do you need a credit card? If so, you must pay attention to your CIBIL score. Falling inside the good CIBIL score range will surely boost your application. However, if your credit score is on the lower end, you should prepare yourself to face rejection.

Interviewing for a job:

You may not have thought that your credit score can impact your job hunt, but it is the truth. Potential employers may look into your credit history when conducting background checks. The reason is that they want to know how financially responsible you are. It is a common practice in companies belonging in the financial industry.

Having a good credit score is crucial in today’s age. Whether or not you plan to borrow anytime soon, you should work to keep your credit history clean.