written by | March 21, 2022

What are the Factors that Determine CIBIL Score Calculation?

CIBIL is one of the leading credit bureaus in India responsible for assessing individuals' creditworthiness. The organisation provides a three-digit numeric score of an individual's repayment capacity, and banks, NBFCs, financial institutions, etc., trust this number to assess their liabilities. Having a high CIBIL score means getting approved for loans and attractive fintech offers. Many lenders classify customers based on their CIBIL score and give them risk-based interest rates on loans. It means to lower the risk profile, the lower the interest rate on loans and vice versa. The minimum CIBIL score for most loans is 700, and in this article, we will go over what it is, how to calculate CIBIL score, and much more.

Did you know?

80% of all new loans are approved with credit scores beyond 750. The higher your score, the more likely lenders will assess your application favourably.

What Is a CIBIL Score?

Your CIBIL Score determines your creditworthiness as a borrower, and having a good score means you get good offers related to new loans and financial incentives. Banks, lending partners, NBFCs, and financial institutions request to look at your CIBIL score before continuing with existing loan applications. CIBIL range is a 3-digit number that ranges from 300 to 900. A rating above 850 is considered very good, while 300 and below can get borrowers blocked in applying for new loans. Most loan applications get automatically approved for individuals with a CIBIL score of 750 or higher.

Factors That Determine Your Credit Score Calculation

CIBIL looks into your credit history, payment types, and other criteria before calculating and assigning a score for your application. Not having a credit mix, outstanding debt, and irresponsible payment behaviours are the top reasons individuals get poor CIBIL scores. Here are the factors that determine your credit score calculation:

1. Payment History

Your CIBIL score calculation is done based on your payment history. Make sure you pay your bills on time and don't default on loan repayments. Your credit score reflects your repayment capacity, and any delinquency can negatively affect your rating.

2. How Many Credit Inquiries You've Made

The more credit inquiries you make, the more negatively your CIBIL score gets affected. It is because CIBIL will think you're a credit-hungry borrower who cannot manage their finances, which is why you're applying for so many loans. A good rule of thumb is not to apply for multiple loans or file borrower applications simultaneously. Instead, if you apply to a single bank, wait until you get a word from them about your eligibility criteria. If you get rejected, you can go ahead and apply elsewhere.

3. Debt-To-Credit Utilization Ratio

Your debt-to-credit utilisation ratio calculates how much debt you have on your CIBIL credit score calculation and the amount of credit you've used up from what's been granted to you. If you max out your credit card limit every month and fail to repay on time or pay the minimum interest, your CIBIL score will get affected negatively. It is good practice not to utilise your full line of credit and only as much as you need to. 

Check your CIBIL score from time to time to make sure you're on track. If you lose a few points or it's too low, start reviewing your cash flow and overall repayment history.

Also Read: What differentiates your credit score from the CIBIL credit rank?

How to Use a CIBIL Score Calculator

CIBIL has a loan eligibility calculator that lets borrowers determine what EMIs they are eligible for. The CIBIL Calculator helps individuals apply for home and car loans and see how much of a loan amount they can get. The next time you plan to approach a bank or financial institution, you can use the CIBIL score calculator at https://www.cibil.com/loan-calculator to determine your eligibility and land attractive customised offers.

How to Register for CIBIL Score

If you don't have a CIBIL Score and it's your first time applying for a loan, you need to generate a number. Here is a step-by-step process:

1. Visit https://www.cibil.com/

2. Click on 'Get Your CIBIL Score'

3. Choose a subscription plan

4. Go to the CIBIL Login registration form and fill in your details such as email, name, phone number, government ID, etc., on the first page of your application

5. Click 'Accept and Continue'

6. You will be asked to verify your identity on the next page. Submit all the relevant details and move on to the payment section

7. Pick your subscription plan and make the payment online. You will receive a confirmation email saying that your registration is successful. 

8. Log in to your CIBIL account now using your registration details and generate your CIBIL score

If you are a company or organisation that wants to register for a CIBIL score, here are the steps:

1. Visit https://cibilrank.cibil.com/

2. Submit all the required details such as company name, business type, GSTN ID, registered office address, state, city, etc.

3. Click on the Proceed button and make a payment via debit/credit card or online banking

4. A CIBIL Login ID unique to your organisation will be shared via email along with the transaction ID and login details after a successful registration. Log in to your CIBIL account using that and generate your CIBIL score.

How to Improve Your CIBIL Score

Here are a few tips on how to improve your CIBIL score:

Repay Credit Card Dues

If you have any existing credit card dues, make sure to pay them back on time. Making only the basic dues and interest amount every month will help avoid late penalty charges. However, interest can add to a mountain of debt which is why you want to pay not just your dues but whatever you borrowed until you're in the clear. If you pay your outstanding amount on time every month, your CIBIL credit score will improve. 

Don't Utilize Your Full Credit

Don't use more than 30% of your credit limit; otherwise, it'll hurt your CIBIL credit score. It is recommended to clear all your credit card dues before this. If you are maintaining your credit utilisation ratio well, you should go ahead and ask for a higher credit limit. Also, make sure you do not apply for multiple credit cards or loans simultaneously.

Check Your Credit Report

Sometimes there are unresolved errors in credit reports, which may go unnoticed. Review your credit reports from time to time and ensure there aren't any missed payments. Errors in reports can range from delayed payments, lack of updates, missing information, etc

Also Read: Know All About your CIBIL Score and Report

Apply for Different Types of Credit

You can apply for different types of credit, such as a mix of unsecured loans and personal loans. Not only will you get attractive interest rates, but this will help you improve your credit history. An individual who has never applied for a loan will generally have a non-existent or zero CIBIL score. When you get different lines of credit, your points increase, and it helps diversify your portfolio.

Be Patient and Stay Consistent

Your CIBIL score didn't become bad overnight, so don't expect it to improve immediately. Stay consistent with your finances, make repayments on time, and make sure you're in the clear. As long as you have healthy borrowing and repayment behaviours, it should reflect in your CIBIL score with time.


If you are interested in getting customised loan offers, you can visit the CIBIL marketplace and browse various personalised loans and credit card offer listings. Now that you know what goes into your CIBIL score calculation, you can take steps towards improving it. Never review your reports at the last minute, and always check your CIBIL rating every month. 

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Q: How long does it take to recover a bad CIBIL score?


It can take anywhere between 3 months to 18 months, depending on how bad your current CIBIL score rating is.

Q: Should I use a CIBIL Score Calculator?


Yes,before approaching a bank, NBFC, or any organisation for a loan, use the CIBIL score calculator. It will help you avoid increasing the number of credit inquiries you make.

Q: Can I apply for a loan without a CIBIL score?


No,you cannot apply for a loan without a CIBIL score. But the only exception to this is if it's your first time applying for a loan. If you don't have a credit history, have never borrowed, and your cash flow is good, which means it reflects in your bank statements, you can go ahead and apply for a loan. Your first loan will help you generate a new CIBIL score. Just make sure you make your EMI payments on time and don't default.

Q: What is the ideal CIBIL score I should have?


You should have a CIBIL score ranging between 700 to 900 if you plan to apply for loans. A higher score will ensure your application gets approved instantly, and you won't have to worry about paying high-interest rates. Your loan processing time will dramatically go down if you have a high CIBIL score, and you won't be kept waiting.

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