What is the Difference between Credit Score and CIBIL Report?

Any individual applying for a personal loan must know about key factors that affect the approval of the loan. Along with the eligibility conditions like age, employment, income etc., lending institutions will ask for the CIBIL score or credit report. This is done to assess the credit repayment history of the borrower. A CIBIL score of 750 and above is considered as good by any lending institution. But if any borrower is confused how CIBIL score vs credit score differs, here is a detailed look at the difference between the two.

CIBIL score vs credit score: understanding credit score – Credit score is a three-digit figure – ranging from a minimum of 300 to a maximum of 700 – that reflects a borrower’s creditworthiness. Four credit bureaus in India provide credit score of individuals to lending institutions for the purpose of assessing eligibility for credit. These are: Credit Information Bureau India Ltd (CIBIL), Experian, CRIF Highmark and Equifax. The Reserve Bank of India (RBI) has approved all the four credit institutions to provide any borrower’s credit score. Though the credit reports from all the four institutions are accepted, lending institutions generally ask for the report provided by CIBIL, which is known as CIBIL score.

CIBIL score vs credit score: difference between both – The difference between CIBIL score and credit score is that while a borrower’s credit report can be prepared by any of the three credit institutions as mentioned above, CIBIL score is provided only by Credit Information Bureau India Ltd.

CIBIL score vs credit score: understanding how a borrower’s report is prepared – Any borrower’s credit or CIBIL score is prepared on the basis of past credit repayment. So the report will take into consideration how one has repaid the past credit dues. The report takes into account credit card dues along with the details pertaining to previous debts. The report also has the personal details of the borrower, like name, Permanent Account Number (PAN), residential address and contact number. Alongside, the report also records any individual’s application for a fresh personal loan or any other loan, including application for a credit card. A credit score or CIBIL score, however, does not include details regarding a borrower’s investments, fixed deposits and savings.

How to check CIBIL score:  A borrower can easily get access to the CIBIL score on the CIBIL website. Along with free reports, one can get access to various value-added plans which are based on paid subscription plans. Many lending institutions provide free CIBIL reports on their website.

CIBIL score and personal loans: To ensure that a personal loan is approved, any borrower must have a CIBIL score of 750 or above. One can improve the CIBIL score by maintaining a good repayment history, not applying for multiple loans simultaneously and selecting a longer loan tenure. Another tip to get a personal loan approved is to add a co-applicant – who can be a spouse or a parent – with a good CIBIL score and income.

Conclusion: Any individual applying for a personal loan must understand the importance of a good CIBIL score for approval of the loan. A borrower must always select a trusted lending institution for getting a personal loan. Along with hassle-free online application and quick disbursal, a borrower can avail attractive personal loan interest rates with trusted lenders.

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