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A good credit score can give you leverage while applying for a loan and add to your creditworthiness. Start working on your CIBIL score by first understanding what it means.
What is Credit Score and Why is it Important
A credit score is a three-digit record of a borrower's repayment of debts. The Credit Information Bureau (India) Limited (CIBIL) is the most popular of the four credit information companies licensed by the Reserve Bank of India (RBI). The four RBI-licensed bureaus are CIBIL (TransUnion), Experian, Equifax, and CRIF High Mark.
CIBIL India is part of an American multinational group called TransUnion, which is why credit scores in India are often called CIBIL TransUnion scores. You might be wondering what an ideal credit score looks like.
What is TransUnion's Ideal CIBIL Score for Consumers?
As explained earlier, a credit score is a number assigned based on a borrower's credit history. Credit history is collected from sources such as banks, credit card companies, and collection agencies.
A consumer CIBIL score is reflected in the 'Accounts' and 'Enquiries' sections of the Credit Information Report (CIR). Credit scores range from 300–900. Consumer CIBIL scores above 700 are considered good or ideal. A score between 550–700 means that you might have a few irregularities in past payments.
A CIBIL score out of 900 helps loan providers know which applicants are most and least likely to honour their loan obligations. Each bank has a credit scoring cut-off. Individuals who manage their loan obligations well build a 'reputational collateral' with lenders, allowing them to negotiate better terms.
Now that you know what CIBIL score to aim for, here are some factors that can affect your credit score.
Factors That Impact Your CIBIL TransUnion Score
A good credit score can lead to better interest rates on loans and faster approvals. It is important to keep your CIBIL score healthy, so keep track of these factors that can impact your credit score:
1. Payment History
When you pay your loan or credit card Equated Monthly Instalments (EMI) on time, it boosts your consumer CIBIL score. A delay in payment or missed payments can cause your score to dip. Repayment history is the single largest factor in your credit score (indicatively around 35%, as per commonly cited models — exact weightages are proprietary to each bureau). Studies have shown that a 30-day payment delay can reduce your credit score by up to 100 points.
Make things easier by registering for eNACH (Electronic National Automated Clearing House), which helps you automate recurring payments such as EMIs. Registering is simple and takes only a few hours.
2. Credit Exposure
Credit exposure, or the Credit Utilisation Ratio (CUR), is the amount of credit you use in proportion to the available credit limit on your credit cards. For example, if you have a credit limit of ₹50,000 on your card and use ₹10,000, your utilisation is 20% of your total available credit.
An ideal credit utilisation ratio is below 30% of your total credit card limit. Higher credit exposure may signal financial stress or a higher risk of default. This factor is indicatively around 25–30% of your CIBIL score, per commonly cited models.
3. Credit History
Your credit history begins when you open your first line of credit. A long credit duration suggests that you have experience in handling credit, which comes in handy when you want to take out larger loans for houses, cars, and other big purchases.
This means, if you are paying things promptly over long durations, you are more likely to pay in the future. Lenders factor this in to offer better interest rates and lower EMIs. Credit history is indicatively around 15% of your total credit score per commonly cited models.
4. Credit Type
There are two broad types of loans — secured and unsecured. Secured loans (home or vehicle loans) require collateral if you cannot repay, whereas unsecured loans (personal loans, credit cards) do not. A balanced credit mix is generally viewed positively. The type of credit is indicatively around 10% of your total CIBIL score per commonly cited models.
5. Other Factors
Your remaining credit score is influenced by factors such as hard inquiries. A hard inquiry occurs when a lender checks your credit report as part of the loan application process. Applying for multiple loans in quick succession can result in frequent hard inquiries and temporarily lower your credit score. Note: As of December 2025, the RBI requires credit bureaus to update loan account status monthly, improving the accuracy and timeliness of your credit report.
How is Credit Score Calculated
There are two simple ways that you can check your CIBIL score:
1. A Free Credit Score Check Online
- Log onto the official CIBIL website
- Fill out the important details and choose your identity proof
- After filling in the details, click on 'Accept and Continue'
- You will receive an OTP on your registered number
- After entering the OTP, click on 'Go to Dashboard'
- You will be able to view your credit score
2. PAN Credit Score Check
- Log onto the official CIBIL website and select Income Tax ID Number (PAN) as your identity proof
- Fill out the required details and click on 'Accept and Continue'
- You will be able to view your online credit score
Now that you have learnt how to check and maintain a healthy CIBIL score, it will make the loan application process smoother. Here is a student-friendly option for study loans.
Learn About Collateral-Free Loans from Propelld
There are alternatives to traditional bank loans, such as private study loans offered by Propelld. While banks consider credit scores, Propelld believes that education should be accessible to all and goes beyond traditional credit scores.
Loans are an investment in the future of our country, and a student's potential should also be factored in. The organisation takes the time to understand the motivation behind education loans or loans for upskilling.
Banks demand tangible collateral security and may reject loan applications due to the student's CIBIL score or financial documents. Propelld has a unique approval process that takes into account a student's academic merit and future ability to learn. It provides study loans for education across the student's lifetime — for school, coaching, college, post-graduation, and even upskilling.
Benefits of Propelld Loans for Students
- 100% digitised loan application process
- Loans are sanctioned quickly
- Customised loans based on the student's profile
- No-cost EMIs
- Propelld loans cover the cost of tuition fees, lab costs, library fees, and more
A poor CIBIL score can impact your future financial journey, so choose your loan partner wisely. Propelld removes the barrier to financial access with student-friendly loans.
Take a look at some of the most common credit score questions and clear your doubts.
