What is the Difference Between CIBIL Score & Credit Score?

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5 min 15 Feb 2024

Difference Between Cibil Score & Credit Score

Highlights:

Meaning of Credit Score and CIBIL Score
Benefits of a Good CIBIL or Credit Score
CIBIL Score vs. Credit Score

If you've ever taken out a loan or applied for one, your lender likely requested your 'CIBIL score'. Among other parameters, lenders use the CIBIL score to gauge your creditworthiness. In this article, we take a detailed look at the similarities and differences between a CIBIL score and a credit score.

What is a Credit Score?

The credit score is a numerical value that denotes an individual's creditworthiness and repayment capacity. In India, there are four credit information bureaus - Experian, Equifax, CRIF High Mark, and TransUnion CIBIL. All these credit information bureaus collect information about a borrower's repayment history, debt situation, credit utilisation ratio, etc. Based on this information, borrowers are assigned a number between 300 and 900, known as a credit score. The closer one's credit score is to 900, the better their chances of loan approval and getting a loan on good terms.

Also Read: Ways to Improve Your Credit Score with a Credit Card

Let us now try to understand what is CIBIL score.

What is a CIBIL score? 

As mentioned before, there are four credit information bureaus in India. Out of these, TransUnion CIBIL is preferred by the lenders and financial institutions in this country. TransUnion CIBIL assigns a numerical value ranging between 300 and 900 to everyone that denotes their creditworthiness and repayment capacity. This number is known as a CIBIL score.

Also Read: What is CIBIL? Understand How It Works and Its Importance

To summarise, the CIBIL score is a subset of credit score - the only notable difference is credit score can be provided by any of the credit bureaus but only TransUnion CIBIL offers your CIBIL score.

Merits of a Good CIBIL or Credit Score

If your credit or CIBIL score is 750 or above, it indicates high creditworthiness and excellent repayment capacity. Thus, individuals whose credit or CIBIL score falls under the excellent category may get approved for a loan quickly and at favourable terms.

CIBIL Score vs. Credit Score: Which One is More Important?

Both credit score and CIBIL score are used by lenders to assess the risk involved in lending funds to a borrower. They are both numerical values ranging between 300 and 900. The only difference is that while an individual can be assigned a credit score by any of the four credit information bureaus in India, the CIBIL score is only assigned by TransUnion CIBIL.

If you are planning to apply for a Home Loan, check your credit rating first. Apply for a loan if your credit score meets the loan eligibility criteria. If your credit score is not up to the mark, work on improving it before applying for a loan.

Also Read: Know How to Check Your CIBIL Score

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