What is CIBIL? and What's Importance of CIBIL Score?

When you're thinking about taking out a loan, it's important to ask yourself, "What's my credit rating?" The CIBIL score is the credit score provided by TransUnion CIBIL in an individual's CIBIL report. It's a three-step process.When you are considering applying for a loan, you should ask yourself, "What is my CIBIL score?" and What's Importance of CIBIL Score? It has a score that ranges from 300 to 900 and is based on your credit history. A CIBIL score of 750 or higher reflects prudent credit behavior tendencies, whereas a score of 500 or less is considered a low CIBIL score.

The borrower's payment history, the number and types of loan accounts, outstanding and initial loan amounts, credit inquiries, and any guarantors on the loan all contribute to determining CIBIL scores. Banks and financial institutions each have their own criteria for what constitutes a satisfactory CIBIL score.

In the loan application process, the CIBIL score holds significant importance. When someone applies for a loan at a bank or financial institution, the lender first examines the applicant's CIBIL score and report. If the CIBIL score is poor, the bank may reject the application outright. Conversely, if the CIBIL score is high, the lender will review the application further and consider additional factors to assess the applicant's creditworthiness.

The CIBIL score acts as the initial impression for lenders; a higher score increases the likelihood of the loan being reviewed and approved. The decision to lend rests with the bank, and CIBIL does not play a role in determining the approval of the loan or credit card.

A score of 700 is generally considered good in most cases.