CIBIL stands for Credit Information Bureau (India) Limited which is a part of “transunion” an american multinational group.  It maintains credit files of around 600 million individuals and 32 million businesses. TransUnion is one of four credit bureaus operating in India and is majorly trusted by banks and Financial institutions due to its greater reliability and popularity in the Indian financial sector.

As from above it is clear that CIBIL is an agency that mainly collects and maintain credit information of customers and uses it for information purposes of lenders, borrowers and ultimately the economy.  

Now let us understand that how CIBIL works and why it is so important ?

i) All the banks and financial institutions operating in india are under an obligation to provide monthly reporting to CIBIL about their borrowers credit history whether they had repaid the loan, credit cards bills, etc on time or had defaulted in either repayment /interest payment.

ii) Based on such credit information from banks it uses  it for further dissemination to lenders for credit evaluation process because whenever a prospective customer approaches any lender for availing credit then such lender prima-facie asks that customer to submit the CIBIL report in order to analysis his credit worthiness.

iii) CIBIL does the rating of both Institutional and Individual Customers based on their credit history and rate them based on CIBIL’s internal rating parameters.

iv) It must be noted here that the CIBIL score is not only useful for the lenders but also for the customers in planning their credit requirements accordingly.

v) A CIBIL score is basically a three digit numeric score of your credit history ranging from300-900.It is calculated by analyzing the credit history and enquiries made by lenders on behalf of borrowers. The Score indicates the ‘probability of default’ by the borrower in future.

vi) The lower the score the poor it is and closer the score to 900 the higher are the chances that your loan application will be approved.  It is important to note that nearly 90% of individuals loans are granted with score greater than 750 which is considered to be a fair score in most of the cases by the lenders.

vii) CIBIL RANK –It is a specialized facility designed only for institutional customers that have outstanding loans of Rs. 10 lakhs to Rs. 50 crores in which CIBIL provides a Rank ranging from 10 to 1. It can be obtained only by the lenders for taking rational decisions but subject to non disclosure to any third party and by the company itself. A score of 10 is considered to the worst and 1 is the best.

viii) We can say that it is forecasting future based on historical data of borrowers.

ix) CIBIL Score impacts your borrowing power because a good CIBIL score may fetch you credit at comparatively lower prices.

Therefore from the above factors we understood that how important is the CIBIL score whether you are going to apply for a loan for your business or a personal loan or even a small credit card application. Hence it is very crucial to keep your CIBIL score good so as to not to face any rejection of credit application.


If you are unable to get your CIBIL score or report, then this is not a case to worry about because CIBIL displays the credit information of only such borrowers who have a considerable credit history with lenders.

Say it is written as NA or NH then it might be that the customer is a new having no credit history or he has not done any transactions in past 24 months.  

In such a case we suggest you to not to worry and you can start/resume your credit history by availing a fresh loan/credit card to appear in CIBIL database. However it is quite often seen that lenders prefer borrowers with a credit history.

Having been discussed about CIBIL and its importance now we shall discuss some basic points to improve or to maintain your credit score intact:

i) Pay your dues on time:Late payments are viewed negatively by lenders. 

ii) Keep your balances low:Always be prudent to not use too much credit, control your utilization.

iii) Maintain a healthy credit mix: It is better to have a healthy mix of secured (such as home loan, auto loan) and unsecured loans (such as personal loan, credit cards). Too many unsecured loans may be viewed negatively.

iv) Do not apply in excitement:You should not apply here and there and everywhere very frequently and excessively. It may impact your history.  

v) Monitor your co-signed, guaranteed and joint accounts monthly:In co-signed guaranteed or jointly held accounts, you are held equally liable for missed payments. Your joint holder’s (or the guaranteed individual) negligence could affect your ability to access credit when you need it.

vi) Review you credit history frequently throughout the year:Monitor your CIBIL Score and Report regularly to avoid unpleasant surprises in the form of a rejected loan application.

You can trace your CIBIL score and generate CIBIL report by paying a nominal amount of Rs 550/-, Rs 800/- and Rs 1200/- for 1 month, 6 months and 1 year subscription respectively on CIBIL website( However viewing your credit score and one credit report with limited features per calendar year is absolutely free. (You can try this)


It is quite possible that there might be certain errors in your CIBIL report which can be related to your Personal Information, Loan history, Income, etc then in such cases you have an option to directly raise a dispute with CIBIL by filing online Dispute resolution form which will be processed within 30 days of raising the dispute.

Your CIBIL information will be updated accordingly after rectifying the errors.

An important thing to note here is that CIBIL considers only your credit history pertaining to any loans and doesn’t have any bearing on your Income, asset or any other factors to determine your credit score.

Therefore it is correct to say that CIBIL Score is a lender’s very important thermometer with the help of which they diagnose their borrowers.

Thank you Remarks

At the end the author hope that this article will help readers in their endeavors and thank them for reading this article. 

Author Bio

Qualification: CS
Company: Paisa Lawgic
Location: Delhi, New Delhi, IN
Member Since: 23 Oct 2019 | Total Posts: 15
A Company Secretary and a Post Graduate in financial administration having working hands in Investment Banking, Manufacturing Sector and Company Secretarial Practice. View Full Profile

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December 2020