What is a CIBIL score?

A CIBIL score is TransUnion CIBIL’s three-digit summary of the loans, cards and lender enquiries on your credit report. It runs from 300 to 900. The Reserve Bank tells every credit information company to use that same scale. A score closer to 900 means, in CIBIL’s words, a higher chance a lender approves a loan. There is no official pass mark, and there is no RBI rule that 8.25% is the rate for a particular score.

Checking your own score does not lower it. A lender’s enquiry, made because you applied, can. You can take one free full credit report, including the score, from each bureau, once in a calendar year. That right comes from the Reserve Bank, not from a website that asks for a fee up front. Dispute a wrong account with the bureau. The correction is free, and the bureau needs the lender to confirm it. The update is due within 30 days.

A score is not a home-loan rate. Lenders use it, along with income and the property, when they decide whether to lend and at what spread over the repo rate. Two people with the same score can be offered different rates. Type the rate from the sanction letter into the calculator. Do not type the score and expect an EMI.

This site does not sell reports and does not take a fee to change a score. Nobody honest can delete a true, current default from the file on request.

A worked example

The EMI engine has no score input. ₹50,00,000 at 8.25% for 20 years is ₹42,603 a month, and ₹52,24,892 of interest over the term, at a score of 300 or a score of 900. The score may have influenced the 8.25% the bank offered. Once that rate is in the letter, the arithmetic no longer looks at the score.

If a closed loan still shows as open, raise it with the bureau and keep the 30-day clock in mind. Pull the free report before you pay a site that promises a “refresh”. The CIBIL guide is the longer explanation. The EMI calculator is where the rate, not the score, becomes a monthly figure.

Mistakes people make

• Paying a broker to “fix” a score. A true default stays until the record ages out under the bureau’s rules.
• Treating 750, or any other round number, as an RBI pass mark. There isn’t one.
• Checking your own report and worrying that the look itself cut the score.
• Assuming one free report means one free report from a single private website. The right is with each credit information company, once a calendar year.
• Entering a score in a loan calculator. Enter the rate.

The rule

The scale of 300 to 900, and the free annual report, come from the Reserve Bank’s credit-information directions. There is no Income-tax Act section for a credit score. Tax starts only if a loan’s interest is something you are allowed to deduct, such as section 22 on a self-occupied house in the old regime.