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September 29, 2025
The TransUnion CIBIL Ltd is one of the leading credit rating agencies licensed by the RBI (Reserve Bank of India) to record and maintain customer borrowing and payment information. This information is also used to assess risk and facilitate lending.
In 2007, the CIBIL score was introduced, a three-digit number that classified customers based on their creditworthiness from previous credit usage. The CIBIL score, which ranges from 300 to 900, reflects your credit behaviour.
Over the years, your CIBIL score has become the benchmark for Banks and NBFCs to assess customers’ behaviour and credit transactions. A high CIBIL score also establishes the individual as a person of integrity who repays dues responsibly and manages finances well.
Your CIBIL score significantly impacts your credit prospects. For first-time credit users, it takes 6 to 8 months of consistent credit activity to generate a minimum CIBIL score for a personal loan.
After receiving their first salary, the bank will offer the new employee a credit card based on their salary account, helping them to build a credit score. While gaining exposure to easy credit, it is essential to realise that funds accessed through credit must be repaid at some point.
Enjoying the benefits of their newfound financial freedom, one credit card often leads to another, and perhaps a personal loan is also taken out for an overseas holiday. Suddenly, they realise that their current income does not cover the repayment of the borrowed money. This subsequently results in delayed repayments and mounting credit card debts. Additional credit is denied as the CIBIL score has declined due to irresponsible credit use.
This is the point when the young professional must recognise the importance of financial discipline and understand that the CIBIL history acts as a watchdog that monitors credit use and influences future credit opportunities.
When applying for a home loan or an Auto loan, the interest rates will be affected by the CIBIL score; therefore, there is much to gain by maintaining a healthy CIBIL score.
A 0 or -1 CIBIL score indicates that you have not yet started using credit, or the loans or credit cards you have obtained are recent; it takes 6 to 8 months to generate a CIBIL score. Banks typically consider your repayment track record for a year before extending additional credit. A credit card or a personal loan, which are unsecured and issued without collateral, can help boost your credit score quickly. The short-term repayment cycle of an HDFC personal loan or an ICICI Bank credit card is effective in demonstrating your credit management skills to lenders.
CIBIL score of 650 to 700 points: If your CIBIL score is above 650, your credit usage hasn’t been exemplary; this is the score range where most credit users find themselves due to the following repayment issues;
Obtaining further credit in such scenarios can be a challenge, and it is advisable to wait and work on your CIBIL score. Making impulsive decisions and taking on credit at a higher interest rate can lead to further debt. If there is an urgent need, consider securing funds through a gold loan or against a security, or a personal loan for those with a low CIBIL score. As we advance, every timely payment will be a step towards redeeming your credit score.
A CIBIL score of 750 points and above is regarded as ideal, reflecting your financial discipline and overall stability. Leading banks and NBFCs readily extend further credit to applicants with a CIBIL score of 750. Personal loans are typically processed at the lowest interest rates, as banks are eager to lend unsecured funds to customers who have demonstrated a consistent repayment history and responsible credit usage. ICICI Bank offers the privileges of its premier ICICI Bank Rubyx credit card to applicants with a CIBIL score of 750 or higher.
The CIBIL score has become essential nowadays, not just for securing a loan or credit card. Someone with an excellent CIBIL score and no missed payments or defaults is considered a trustworthy individual who is financially responsible. Conversely, a person burdened with debts is a stressed individual, which can affect efficiency at work and a restful atmosphere at home. Therefore, the CIBIL of an individual is checked before he is offered employment at a higher designation.
To ensure that your tenant who is taking your premises on rent will be paying the rent on time, landlords check the CIBIL of the hopeful tenant to ensure that they pay their dues on time. Business deals also hinge on the CIBIL scores of the directors and the company to check the financial standing.
On a lighter note, a bride-to-be requests a CIBIL check of her fiancé to ensure he is not in debt and is financially dependable for a secure future ahead.
Is too much importance being given to the CIBIL score? This debate has also been raised in Parliament by an honourable Minister who believed that lenders have started to place undue emphasis on the CIBIL score, and banks should look beyond it. As a result, banks have been advised not to reject applicants solely based on their CIBIL record and to process a personal loan for low CIBIL score.
On the other hand, with the digitalisation of identity documents such as the Aadhaar card and PAN card that are linked to an individual’s bank account, all records of dues and payments become transparent. In the future, the payment of your utility bills may also be linked to your credit history.
Getting credit is not impossible without a CIBIL score; an applicant can apply online for an instant HDFC Bank personal loan even without a credit history. ICICI Bank also grants personal loans to applicants lacking a CIBIL score if their employer is listed in the approved company category of the bank. Although the Banks are apprehensive due to the absence of a CIBIL score, they may also do additional enquiries to ensure the applicant has not tampered with the KYC details.
However, with the rise of digital banking and online payment facilities, reporting credit repayments to CIBIL has become increasingly transparent. Keep updated about your CIBIL score and try to pay your credit dues on time, as the CIBIL score may catch up with you sooner than you think!
