How Is CIBIL Score Calculated?
If you are a first-time borrower who requires an instant loan, you may have heard the term CIBIL score from your lender. You must have been informed that having a good CIBIL Score improves your chances of availing an instant personal loan.
Instead of worrying about the fact that you may be unaware of this term and its implications, it is important to know what a CIBIL Score is and how it is calculated?
To start with, a CIBIL score is a numerical representation of your creditworthiness. It is a three-digit number that is assigned to you by CIBIL, based on your credit history. A high CIBIL score indicates that your creditworthiness is high, whereas a low CIBIL score signifies otherwise.
CIBIL Score Calculation
If this score determines your creditworthiness, how is the CIBIL score calculated?
There are a few factors that determine to calculate CIBIL score online. Each of these factors has a certain amount of weightage attached to them. Based on these factors, you can check your CIBIL score.
Sr No | Factor | Weightage | Explanation |
1 | Repayment History | High | Your repayment history holds the maximum weightage when it comes to calculating your CIBIL score online. If you have repaid your bills and past loans on time, it would indicate that you have a good repayment history with your lenders. |
2 | Credit Balance and Utilisation | High | Your credit utilization factor is the second factor that holds high weightage when it comes to your CIBIL score check online. Credit utilization will be the amount of credit that you have used from the available credit balance that has been assigned to you. In an ideal scenario, you should utilize at least 30%. If this percentage increases, it indicates that you may be struggling with your finances and can come across as credit hungry. |
3 | Duration of Credit | Moderate | The duration of credit is the tenure you require to repay a loan or credit availed. If you have availed personal loan for 4 years and successfully repaid the EMIs on time, it will have a positive impact on your CIBIL score. |
4 | New Credit | Moderate | Did you know that constant credit or loan enquiries can affect your CIBIL score? If you are continuously approaching lenders to avail of a new loan or applying for a new credit card, the chances of your CIBIL score falling are higher. |
5 | Credit Mix | Low | A healthy and balanced credit mix will be a combination of secured loans, personal loans, credit cards, etc. |
What Is The Ideal Cibil Score A Borrower Should Have?
CIBIL scores range from 300 to 900. Where you stand on this numeric scale will get you your instant personal loan approved.
Credit Score | Chances of approval |
Less than 650 | If your CIBIL score is less than 650, the chances of your personal loan being approved are very low. |
Between 650-699 | This range is considered to be a good range. A score between 650-699 indicates that you have decent creditworthiness and the chances of loan approval are good. |
Between 700-749 | A score between 700-749 indicates good creditworthiness and the chances of your loan being approved are high. |
750-900 | Anything above 750 would mean that you have excellent creditworthiness and that you have not defaulted on any payments to date. |
A good CIBIL score range is between 700 and above. This, though, may not be possible for everyone. However, if you wish to avail of an instant loan with a low CIBIL score, you can do so through Finnable.
If you are applying for a loan for the first time, chances are you may not have a CIBIL score. If you find yourself at that end of the spectrum, you can have a NA (Not Applicable) or NH (No History) mentioned in your online CIBIL report.
Through Finnable, you can avail of an instant loan without CIBIL with NA/NH rating in their report as well.
Where Can You Check Your Cibil Score?
Now that you have understood how the CIBIL score works, where can you find out what your score is?
You can check your CIBIL report online.
Checking your CIBIL score online is simple. Just by following a few steps, you can generate your CIBIL report as well know your CIBIL score:
- Log on to CIBIL’s official website and click on know your score.
- Fill in the online form which will include your personal details including your name, gender, age, PAN number, past loan history, etc.
- Once this is filled out, you will be directed to the payment page.
- Once the payment is done, the report will be sent to you by email.
Avail Of An Instant Loan Without CIBIL Through Finnable:
Though many lenders’ disbursing instant personal loans ask for a CIBIL score, this is not the case with Finnable.
Finnable understands that everyone cannot have a high CIBIL score or even have a CIBIL score at the start. Hence, they have made it easy for people to avail of instant loans with a low CIBIL score. This can be done through Finnable’s personal loan app by following a simple 3-step process:
- Download the personal loan app and create your profile. Enter your personal and professional details.
- Choose the type of product you are looking for and enter the amount as well as the loan tenure.
- Upload the required documents. Finnable will verify the documents and if everything is in place, the loan amount will be credited into your bank account within 6 hours.
You can avail of a wedding loan, travel loan, medical loan, and vehicle loan through Finnable’s online loan app.
Learn with Finnable
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