Difference Between a CIBIL And a Credit Score?

TransUnion generates the credit score and people call it a CIBIL Score. On the other hand, there are some credit bureaus that generate Credit Score but people know it through the name of a credit score only. The TransUnion CIBIL is the benchmark of credit scores and the only one that banks consider throughout the country. While there are a number of different credit bureaus that provide credit scores, banks prefer to use CIBIL. This is the basic difference between a CIBIL Score and a Credit Score. 

Formation of TransUnion CIBIL

TransUnion CIBIL Limited (formerly Credit Information Bureau (India) Limited) was founded in 2000 as India’s first credit information firm. It collects and saves personal and business credit data, such as loan and credit card information. It collects and retains information about personal and business credit, such as loans and credit cards. The member institutions send these records to the credit bureau on a regular basis.  After then, the bureau analyses the data to develop credit reports and credit ratings. It’s vital to note that CIBIL is merely a credit information database, and the credit bureau makes no loan judgments. It solely gives data to banks and other financial institutions for the purpose of vetting loan and credit card applications. Banks also trust the credit scores that the TransUnion CIBIL provides to them.  

Classification of CIBIL Score

Here you can see the classification of CIBIL score available in a three-digit number. The category ranges from negative to a maximum CIBIL score of 900. CIBIL Score is a credit score that ranges between 300-900. The categories of CIBIL scores in India are:

800 or above:- This score is generally an exceptional credit score and it suggests that the lender is willing to offer you the best possible interest rate on a loan. This category of applicants is most likely to get the least interest from banks on their loans.

740 – 799:- This score is a very good credit score and banks are willing to provide you with a low-interest loan as you are a low-risk applicant.

670-739:- Although the credit score falling under this category is a good credit score. The banks consider you as a moderate risk applicant and thus offer a loan with a comparatively higher interest.

580-669:- Banks consider these scores as a high-risk applicant and are most likely to charge a very high-interest rate and there are chances that a bank may even reject their application.

Below 580:- Anything below 580 is considered as a poor credit score and the chances of getting the loan application approved by any bank are very less for this category of applicants.

Credit Score between 1-5:- A CIBIL score of 1 to 5 is displayed when the borrower has a credit score of less than 6 months. This indicates the level of risk that a lender may experience when lending to a new borrower. Where 5 denotes a smaller risk and 1 denotes a higher level of risk.

Credit Score is Zero or Negative:- A Zero credit score indicates NH or No History where a negative score indicates NA or Not Available.

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