How is Your CIBIL Score Calculated?

Today almost no loan or credit card application gets approved without checking the applicant's CIBIL report and CIBIL TransUnion Score. Ever wondered how a person's credit score is calculated? Here's a quick glimpse into what goes into the making of a person's CIBIL TransUnion Score:

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How is the score calculated?

While each credit information company has its own proprietary algorithm to calculate an individual's credit score, the most important elements of the score composition are centric around the loan payment behavior of the individual. Your CIBIL TransUnion Score is calculated based on the information in the "Accounts" and "Enquiry" section of your CIBIL Report. The score is calculated based on the following factors:

  • Credit Utilization: How much credit is the consumer using?
  • Defaulting/Delinquency: How many accounts are past due and by how many days?
  • Trade Attributes: How old are this consumer's lines of credit? What type of credit does he have? Does the consumer have a good mix or balance of credit or is it all credit cards?

Here is a breakup of the various factors that impact the CIBIL Transunion Score:

1. Past Performance. Individuals past performance on their debt obligations is the most important criterion and contributes approximately

30 per cent weightage to the score

2. Credit Type & Duration. Type of loan availed whether secured or unsecured loan, and the duration of credit history established contributes an additional 25 per cent to the score.

3. Credit Exposure. The total amount of credit exposure contributes another 25 per cent

4. Other factors. Other factors such as credit utilization, recent credit behavior contribute the remaining 20 per cent to the score.

Your CIBIL Report and CIBIL TransUnion Score not only determine whether or not you qualify for a loan, but it may also have an impact on the terms and conditions on which you can avail the loan. The higher the credit score, the better your chances of availing the loan faster and on favorable terms. It is advisable to check your CIBIL Report and CIBIL TransUnion Score before applying for a loan. Timely payments of loan EMIs is most important for maintaining a good credit history and a healthy credit score.

(Harshala Chandorkar, Senior Vice President - Consumer Services and Communication, CIBIL)

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