Your creditworthiness is essentially quantified by your credit score. This rating demonstrates to lenders or other financial institutions your capacity to pay back the amount borrowed. A three-digit CIBIL Score typically ranges from 300 to 900.

The terms "Credit Score" and "CIBIL Score" are frequently used synonymously. However, one of the most reputable credit information businesses in the nation is CIBIL, also known as TransUnion CIBIL Limited. Millions of people's credit histories and information are gathered by this company. The CIBIL Score is frequently referred to as the "Credit Score" in India due to its excellent reputation. Let's understand what affects CIBIL score and how to improve CIBIL score in this article.

What do you mean by CIBIL Score?

 The full form of CIBIL is Credit Information Bureau (India) Limited, which is an authorized credit agency by the Reserve Bank of India (RBI) that can calculate an individual's credit score.

The CIBIL Score, which ranges from 300 to 900, is a three-digit numerical summary of your credit history, rating, and report. This rating demonstrates to lenders or other financial institutions your capacity to pay back the borrowed amount..

A credit score of 750 or higher is typically thought to be good for getting a loan or credit card application approved. It will be difficult for you to access credit if your score is below 750. The interest rates will probably be higher even if your application is accepted. A bank or NBFC is also very unlikely to approve your application for a credit card if your CIBIL score is below 650.












What elements affect your CREDIT SCORE?

Your CIBIL or credit score is impacted by a number of factors, which helps to lower the number. However, the main elements that could affect your credit standing are listed below.

Repayment Of Loan

Your ability to make credit repayments is revealed by your credit repayment history. It is also the main factor taken into account when calculating your credit score. Your ability to diligently meet your financial obligations by making on-time credit and EMI payments are demonstrated by your repayment history. Your credit health is harmed and your credit score is significantly reduced when you fall behind on credit card payments or do not repay loans within the allotted time.

If you have a history of missing payments, it may be prudent for no lending institution to offer you any credit to be on the safe side. Therefore, if you've previously neglected to pay your claims, it will show negatively on your credit rating, which will eventually cause your credit score to drop.

Having several loans and credit cards 

Multiple loans, both unsecured and secured, could lower your credit score. Similarly, having several credit cards could lower your credit score. Because they show just how much debt you already have. Before approving your loan request, banks or other financial institutions typically look at your debt-to-income (DTI) ratio. If your DTI ratio indicates that you are already overextended, they may not be willing to extend you additional credit. They will assume that you are unable to pay your monthly EMIs. However, not only does having multiple credit cards harm your credit score; closing old credit cards may also harm your credit score. When you close a credit card, it reduces your total available credit. Unless you reduce your spending, your credit utilization rate, which is one of the most important factors used to calculate your credit score, will suffer. As a result, if you have multiple loans, credit cards, both active and closed, and new accounts, your credit score may experience severe.

Make Use Of Old Credit Cards

It is totally false to think that credit card accounts that aren't being used anymore should be deactivated. Many people are unaware of how such a move affects the three-digit rating. It's actually a blessing in disguise to have a well-managed credit card account that has been kept for a long time and has no outstanding balance. These cards provide the credit score with a much-needed boost. The longer a person keeps a credit card with a good repayment history, the better their chances are of improving their CIBIL rating.

Credit Utilisation Ratio

The credit utilization ratio is the percentage of total credit used compared to total available credit limit across all credit products.

With a high credit utilization ratio on a consistent basis, you are considered to be at high risk of default, which lowers your CIBIL score.

It shows your total credit limit as well as how much you've used so far, i.e. how much you owe. The less credit you use, the higher your credit score.

Credit Mix

The mix of credit accounts against your loan portfolio also has a significant impact on your credit score. A portfolio is simply the number of secured and unsecured credit lines in your name. A secured loan, as the name implies, is backed by collateral in the form of an asset. A non-secured loan is one that does not require collateral. Servicing a mix of loan EMIs and credit card dues effectively demonstrates your ability to manage the various types of available loan options. It also contributes to the strengthening of your credit history and makes your profile appear creditworthy.

Outstanding Dept

Your credit report will be greatly impacted by unpaid debt. Make sure to pay off any outstanding debt as soon as possible. Unpaid debt history can negatively affect your score significantly. Make sure to pay back both large and small sums as soon as possible.

How Can You Improve or Raise Your CIBIL Score?

·       Maintain a good balance of secured and unsecured debts in your lending activities.

·       Maintain a low frequency of loan applications.

·       Review and monitor your credit report on a regular basis.

·       Choose a Balanced Credit Mix

·       Pay your credit card and loan EMIs on time:

·       Keep your credit utilization ratio low.

·       Make no immediate loan inquiries.

·       Create a credit history

·       Request Increased Credit Limits

·       Keep old debt records

·       Maintain Multiple Credit Lines

·       Maintain Consistency

·       When applying for new credit, use caution.

What Does It Mean to Have No Credit Score?

If you don't have a credit score, it means you've never opened a credit account, such as a loan or credit card. Young adults frequently lack a credit score because they have no credit in their name.

It's not the same as having bad credit to have no credit score. When you misuse credit, it shows up on your credit reports negatively, which leads to bad credit. Your credit score will therefore be affected if you have a history of late payments, defaulting on loans, bankruptcy, liens, or any other actions that result in bad credit.

On the contrary side, having no credit indicates that there hasn't been any recent credit activity that the credit bureaus can use to calculate your credit score.

You might not have a score for a few reasons. Because you might be young and inexperienced with credit, you might not have had enough time to establish a credit history. There aren't enough recent data to generate a score because you could have used credit in the past but haven't done so recently.

Even if you've recently used credit, you might still end up without a score. That's because some lenders might only or never report the activity on your account to the credit bureaus. In reality, although most do, lenders are not required to report to any of them.


You must be aware of what a CIBIL score is by this point and how your credit rating affects it. If you frequently use credit sources, it is imperative to periodically check your credit report. It will enable you to keep a close eye on your credit score and prevent situations in which getting new credit presents difficulties. Additionally, it can help you determine the adjustments you should make in order to raise your score over time.