Credit Scores in India: How To Get Better CIBIL Credit Score?

Credit score is basically a three digit numeral which can have value from 300 to 900 and used to summarize the credit history of an individual. If the credit score is higher, then it means that the individual is very good and trustworthy in managing his financial transactions. If the credit score is lower, then it means that the individual does not have the ability to manage the financial transactions efficiently and is not trustworthy.If the individual does not have any credit history, the score will be –1 and it will be zero if the history is less than six months.

The Credit Information report (CIR) will contain the credit score, information of the borrower like Name, DOB, address, employment details etc.It also contains all the financial transaction like loan, credit card etc and how the payments are done for each of them.

Who uses the credit score?

Credit score is used by lenders like banks to assess the ability of the individual in paying the money back if borrowed. It is also used by mobile phone or insurance companies to evaluate the individual before giving phone connection and policies respectively. The government organizations also evaluate these scores while recruiting for some higher positions. The credit score provided by CIBIL is called CIBIL Trans Union score.

Who calculates or maintains the credit score?

CIBIL stands for Credit Information Bureau (India) Limited and was started in the year 2000. It basically collects the details of the individual’s payment to loans and credit cards from the banks and other financial institutions every month. It then generates the credit information report (CIR) which contains the credit score, personal information and payment history of the individual. The report is then given to the financial institutions for helping them to decide on the loan application of the individual.

Even though CIBIL score is the most popular one, there are also few other companies who calculate the credit score and they are Experian, Equifaxand Highmark who are given license in 2010 to function as credit information company.

How to track credit score?

It is important for an individual to know their credit score as we don’t know when there will be a need of getting a loan.To get the personalized credit score go to the CIBIL website Credit Score page,fill up the form available there and pay the fee of Rs.470 through net banking or credit card using the payment gateway. If the payment is successful, you will be asked 3 to 5 security questions about your existing loans or credit cards. If you answer correctly for the security questions, your application is approved and you will get the credit score emailed to you within the same day. You will also be provided an username and password for managing your account on CIBIL and you can track all the activities on your credit score like enquiries made  on your credit score by companies etc.

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How to get better credit score?

Banks and financial institutes sanction loans based on the credit score these days.So you should keep your credit score always good.You cannot improve your credit score overnight and it may 1 year or more to build it.

1. Pay all your bills of the credit card and EMIs of the loans on time as late payment will decrease your credit score and it may not create a good impression for the lenders.

2.Make sure your credit card balance is always low. For eg, if the credit card limit is Rs.50,000 and the balance is Rs.10,000 it means you have a debt of Rs.40,0000 which is not good.If you use more of your credit card on a regular basic, it means that you have more unsecured debt which will be a drawback and can prevent the lender to sanction loan to you.

3.Maintain your credit history as a mixed combination of loans and credit cards. If you have only credit cards, it will mean that you are in more debt and the companies may not sanction the loan for you.
4. If you are not using a credit card actively, close the account which will make the lenders think that you have less debts and financially more stable.

5. Keep an eye on joint accounts regularly. If your partner did not maintain payments correctly, it may affect you as well.

6. Don’t become a guarantor for anyone’s debt as their performance will affect your score as well.

7. Don’t inquire too many applications in same time. For eg. Don’t apply for a car loan and personal loan at the same time, which will imply that you are financially unstable.
Benefits of good credit score

8. Make sure the overall outstanding debt is always less than your monthly salary.

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Benefits of good credit score

– The approval for a car loan or a home loan or credit card will be easier and takes only less time.
– Interest rates on credit cards will be reduced if you keep good credit score.

Here’s some more info about how to improve your CIBIL credit score.


Hi, Mani Karthik here. Having lived in USA, India & Middle East, and worked for big MNC’s to startups, I have a lot to share with you. My aim is to help people, by sharing everything I’ve learned in life, through this blog. It’s read today by more than 150K people world over! I currently live in LA, California and visit India occasionally. Here’s my full story on who I am and why I blog. Connect with me on FacebookInstagram, Twitter or WhatsApp (+001-408-489-4785). Happy to help! 🙂

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3 Comments

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    • Yes Gijo, you can use any third party app as well, but I’m not entirely sure how secure they are or how your financial profile will be used, possibly exposing it to third parties. I tried one and started getting spam emails from financial products soon after. Hope that isn’t happening in your case.

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