CIBIL score or credit score is an essential factor in determining whether your loan or credit card application will be approved or not. This score is calculated on the basis of your credit history – past credit debt, payment patterns, timely repayments and defaults. A high score establishes excellent credit worthiness while a low score could dissuade lenders as it would make you a risky borrower. The primary components and their percentages are generally as follows:

Component Percentage
Past performance 30%
Credit exposure 25%
Credit type and duration 25%
Other factors 20%

How to check CIBIL score?

You can apply for and check your CIBIL score online. You may simply visit their website ( and put in your details in their online form. The process is simple, easy, swift and convenient, and you can get your score for a certain fee. All requisite details are available on the website.

What is a good credit score?

To understand what can be termed as a good or bad credit score, you must take a look at the table below.

Credit score What does the score imply?
750-900 brilliant credit score

dependable and flawless repayment record

helps get loans at competitive rates of interest from different banks

both Secured and unsecured loans will mostly be approved easily

700-750 Fairly good credit score

Good loan repayment in the past

Can get loans at competitive rates

Depending on eligibility, can receive secured loans relatively easily

For unsecured loans, banks might consider more in-depth analysis

550-700 Low credit score

Irregular repayment record

Lenders will approve loans without a thorough background check

Lenders may ask for higher rate of interest

Credit providers may opt for low loan-to-value (LTV) ratio and high collateral

300-500 Poor credit score

Particularly irregular repayments

Very difficult to get a loan

How can I improve my CIBIL score?

You should always aim to be in the score bracket of 750 to 900. In order to ensure that, here’s a list of things you need to take care of.

  1. 30% credit utilization

Use your credit card wisely and try not to exceed 30% of the credit limit. This will establish your knack towards financial discipline and money management. Alongside, it will also help increase your CIBIL score because a low credit utilization will reflect positively on your CIBIL score. You can refer what is Cibil Score article on Paisabazaar for indept knowledge.

  1. Opt for enhanced credit limits

If your rating is good, most banks will offer you enhanced credit limits on your credit card. Whether you intend to use the increased amount or not, do not refuse the offer. It will reflect the confidence banks have in you and would mean that although you have credit at your disposal, you maintain utilization below 30 percent. That will have a positive impact on your CIBIL score.

  1. Ensure timely payment of dues

It would be good if you can plan your credit card spending. Make a mental estimate of the spending on your card and you would know how much credit balance you have to clear off. So, spend only to the extent to which you are confident about repaying well within the monthly due dates. Timely repayments always help improve CIBIL scores. Outstanding dues can reduce your credit score noticeably. To restrict your spending impulse and keep track of your purchases, opt for a maximum of two credit cards. Paying off your pent-up dues all at once with a stock of money might not help improve your credit score because that makes your financial records look unstable. Regularity and timely payment is the key to improving credit scores.

  1. Make use of old credit cards

Do not deactivate the credit card accounts which you have not been using since a really long time. A good account wherein payments have been cleared in a timely manner over a prolonged time period is a positive boost for your credit score. Hold on to a card with excellent repayment track record to better your CIBIL score.

  1. Decrease the frequency of (re)application

In case your credit card or loan application has been rejected by a bank, it might not help to approach another bank right away. Your former rejection will be recorded in your credit report and chances are, that your application will be rejected again. So hold back for some time and work towards improving your credit score. Once you re-apply with an improved credit score, the prospects of getting a loan would be better.

A bad CIBIL score can land you in a soup, especially if you are in need of some funds urgently. Therefore, obtain your CIBIL score, keep checking it at regular intervals, and get into the practice of keeping track of your financial health.