What is the CIBIL Score?
A CIBIL score is a three-digit number that represents your creditworthiness, based on your credit history. It ranges from 300 to 900, a high score meaning you are more likely to pay back what you borrow.
This score is created by CIBIL (Credit Information Bureau India Limited) based on your past credit behaviour, like paying EMIs or credit card bills on the same time. A good CIBIL score(usually above 750) makes it easier to get loans, while a low credit score can lead to rejections or higher interest rates. It’s like your financial reputation for lenders.
Minimum CIBIL Score for Personal Loans
When you apply for a personal loan, lenders don’t ask for collateral or security, which makes these loans unsecured. This means lenders decide your creditworthiness to decide whether to approve your application. A good CIBIL score acts as a trust factor, showing you are financially responsible and likely to repay.
CIBIL score ranges from 300 to 900, and each range indicates a different level of creditworthiness.
- 750–900: Excellent. Borrowers in this range are highly likely to get their loans approved with favourable terms and lower interest rates.
- 650–749: Good. You may still get a loan, but interest rates might be slightly higher.
- 550–649: Average. Lenders may view you as a moderate risk, and approvals might come with stricter conditions or higher interest rates.
- 300–549: Poor. It’s challenging to get loans with this score, as lenders may see you as a high-risk borrower.
Factors Affecting Your CIBIL Score
Your CIBIL score represents your credit behaviour and financial discipline. Several factors contribute to this score and understanding them can help you manage and improve your creditworthiness.
Payment History
Paying your credit card bills and EMI on time improves your credit score. Missed or delayed payments can lower it.
Credit Utilization
Using a high percentage of credit shows over-dependence on credit and can lower your score. Always aim to keep utilization below 30%
Length of credit history
A long credit history with responsible behaviour boosts your score, as it shows consistent credit management.
Types of credit accounts
Having a mix of credit types (secured loans like home loans and unsecured ones like credit cards) helps maintain a balanced profile.
How to check your CIBIL Score?
Visit the CIBIL website:
Go to the official CIBIL website (www.cibil.com) log into your account or create one by providing your personal details like name, email, phone number or date of birth). And check your CIBIL score.
Use partners website:
Websites like Finnable, BankBazaar, PolicyBazaar, and CreditMantri also allow you to check your credit score for free.
Mobile apps
Apps like CRED OR Wally provide access to your CIBIL score.
How Often Should You Check Your CIBIL Score?
You should check your CIBIL score atleast once in a year to monitor your credit health and ensure there is no errors in your report. If you’re planning to apply for loan check it few months ahead to allow time to improve your score if needed.
CIBIL Score vs Other Credit Score
| Aspect | CIBIL Score | Other Credit Score |
| Issuer | Credit Information Bureau (India) Limited. | Issued by other credit bureaus like Experian, Equifax, or CRIF High Mark |
| Scoring Range | 300-900 | May vary by bureau (e.g., Experian: 300–850) |
| Focus Area | Predominantly used in India | Global or regional focus |
| Usage by Lenders | Most widely used in India for personal loans, credit cards etc. | Used as an alternative or cross-verification. |
| Weightage in India | Highly influential for indian lenders | Secondary but still considered by some lenders |
Can You Get a Personal Loan with a Low CIBIL Score?
Yes, it is possible to get a loan with a low CIBIL Score, but it often comes with certain challenges and trade-offs.
- NBFC’s: These are more flexible than banks and may approve loans for individual with lower score, though at higher interest rates.
- Peer-to-Peer Lending (P2P): Online platforms connect borrowers with individual lenders. They are less strict about credit scores but may charge higher rates.
- Secured loans: Opt for loans secured against collateral, such as gold loans or fixed deposit loans, to improve approval chances.
- Loans with a Co-Applicant: Applying with a guarantor or co-borrower who has a good credit score can increase approval chances.
- Employer-Tied Loans: Some employers offer personal loans to employees with relaxed credit checks.
Conclusion
Maintaining a minimum CIBIL score is essential for securing personal loans at favourable terms. While different lenders have varying minimum score requirements, a higher score not only improves your chances of approval but can also help you negotiate lower interest rates and better repayment terms. Regularly monitoring your credit score, practising responsible credit habits, and addressing issues proactively can ensure your financial profile stays strong, enabling you to access credit whenever you need.
Frequently Asked Questions
What is the minimum CIBIL score required for a personal loan?
The minimum CIBIL score to approve for most lenders is around 750. However, some banks and NBFCs may approve loans with a score as low as 650, but this often comes with higher interest rates.
Does a higher CIBIL score guarantee loan approval?
A higher CIBIL score increases your chances of approval and helps you secure better terms, it doesn’t guarantee loan approval. Lenders also consider other factors such as income, employment and stability.
How long does it take to improve the CIBIL score?
Improving your CIBIL score takes several months, depending on your financial behaviour. Consistently paying your bills on time and reducing outstanding debts can show improvement in as little as 3 to 6 months.
What happens if I don’t have a CIBIL score?
If you don’t have a CIBIL score, it may be difficult to qualify for a personal loan. Lenders will not have a credit history to assess your repayment behaviour, making it harder for them to determine your creditworthiness. In such cases, you may need to provide additional documents like proof of income or get a co-applicant.
What is the effect of applying for multiple personal loans on my CIBIL score?
Applying for multiple loans in a short period results in multiple hard inquiries on your credit report, which can slightly lower your CIBIL score. It’s important to apply only when necessary to avoid this negative impact.
