Terms like CIBIL credit report and CIBIL credit score are very common in the financial world, especially when you are about to apply for a credit card or a loan . You may be left confused between the two terms if you are someone who is new to the world of credit. It is critical for you to understand the difference between a CIBIL credit report and a CIBIL credit score as it will help you in your financial journey.
Credit is essential, whether you are an individual or a business. To achieve financial goals like purchasing a home, a car, or opening a business, a person needs credit. Banks and other financial entities offer loans to individuals. However, before extending credit to individuals, banks and lenders need an assurance that the potential borrower will repay the debt they are asking for. To assess the creditworthiness of the borrower, credit score is taken into consideration.
CIBIL is one of the credit reference agencies in the country that calculates the creditworthiness of an individual based on which, lenders and banks make their decision.
Let us understand the difference between a CIBIL Report and a CIBIL credit score in detail.
What is a CIBIL Credit Report?
A CIBIL credit report, often referred to as a Credit Information Report (CIR), is a comprehensive document that contains details about an individual’s current and past loans, credit related information, and other personal data like their PAN number, date of birth, place of residence, gender, and so on. In order to produce a thorough CIBIL credit report, credit bureaus gather credit information from banks, financial institutions, and lenders.
A person’s CIBIL credit report may have the following details:
So, it can be said that a CIBIL credit report is a detailed document of an individual’s financial history that helps a lender to assess the associated risk if they agree to lend to the potential borrower.
What is a CIBIL Credit Score?
A CIBIL credit score is a three-digit numerical representation of a person's CIBIL credit report based on their credit history. The CIBIL credit score ranges from 300 to 900. The likelihood that a person's credit card or loan application will be approved increases when their CIBIL Score approaches 900. Any score above 750 is a good CIBIL Score and assists lenders in evaluating and accepting your loan application.
What Factors Impact your CIBIL Credit Score?
Your CIBIL credit score is calculated based on a wide array of factors. Not only is the repayment pattern taken into consideration while your credit score is calculated. Listed below are some of the major factors that impact your CIBIL credit score:
A CIBIL credit report and a CIBIL credit score are two entirely different entities. A credit score is a part of the CIBIL credit report. Whereas a CIBIL credit report is the detailed summary of your financial activities. Try to maintain your CIBIL credit score if you wish to receive loan offers at lower interest rates as a bad credit score will attract high interest rate loans.
FAQs Related to CIBIL Credit Report Vs CIBIL Credit Score
CIBIL stands for The Credit Information Bureau (India) Limited and is one of the credit rating agencies in India. The credit reference agency uses the data provided to them by banks, NBFCs, lenders, and other financial institutions to calculate a score, known as CIBIL credit score. A CIBIL credit score is a numeric representation of your financial behavior.
Your CIBIL credit report will have the credit score that you need. Download your CIBIL credit report and check your credit score.
If you have a CIBIL credit score of more than 750, it is considered to be a good score. Your CIBIL credit report is regarded as ideal if your score is beyond 750.
If your CIBIL credit report has a credit score of 1, it means you do not have a credit history at all. You can start your credit history by taking out a credit card or a loan. Having a credit history is extremely essential as it helps you build a trust factor with the lenders and banks as you may need credit in the future.