Often times, CIBIL and credit score are used in place of each other, they are not exactly the same. CIBIL is one of the leading credit information companies in India and stands for Credit Information Bureau (India) Limited.
CIBIL score specifically refers to the credit score provided by this agency which is a three-digit numeric summary of your credit history. The score ranges from 300 to 900, with 900 being the highest score.
This score is calculated based on your credit history, including your credit accounts, payment history, outstanding debts, length of credit history, and recent inquiries.
What is a credit score?
Credit score is a more generic term that refers to a numeric representation of an individual’s creditworthiness.
Credit scores are provided by various credit bureaus and agencies, not just CIBIL.
CIBIL score is a type of credit score – there are different scoring models and algorithms used by different credit bureaus to calculate credit scores.
Just like the CIBIL score, credit scores from other bureaus are also based on similar factors such as payment history, credit utilisation, length of credit history, types of credit accounts, and recent inquiries.
In summary, the main difference lies in the fact that CIBIL score specifically refers to the credit score provided by CIBIL, while credit score is a broader term that encompasses scores provided by various credit bureaus. However, both scores serve the same purpose of assessing an individual’s creditworthiness.
Frequently Asked Questions:
What is a CIBIL score?
It is a three-digit numeric summary of your credit history. It ranges from 300 to 900, with 900 being the highest score.
Which are the other credit rating agencies?
Credit scores are provided by several bureaus and agencies. Other credit bureaus include Experian, Equifax, and CRIF High Mark.
How is a credit score different from CIBIL?
Credit score is a more generic term that refers to a numeric representation of an individual’s creditworthiness. CIBIL score specifically refers to the credit score provided by CIBIL.
What is credit utilisation ratio?
This is the ratio of credit card balances to your credit limits. Exhausting too high of your available credit indicates financial stress and may impact your score adversely.
Do debt levels also impact the credit score?
Yes, they do. The amount of debt, particularly in proportion to your income, does have an impact on credit score.
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Published: 06 Mar 2024, 02:45 PM IST