What is the Difference Between CIBIL Score and CIBIL Report?

September 13, 2019

Terms like credit score, CIBIL score and credit report can be very confusing for loan applicants. Check out this post to know what these terms are and how are they different from one another.

Banks now lay a major emphasis on the credit history of a loan applicant. They prefer lending money to borrowers with a decent credit history in order to minimise the risk of default. Banks use the ‘credit score’ of an applicant in order to decide whether or not he/she is a responsible borrower. You will come across many different terms on the internet such as CIBIL score, credit report, etc. How are these terms different from one another? Let us have a detailed look at these terms to understand the differences.

Difference between CIBIL Score and Credit Score

To understand the difference between the CIBIL score and credit score, it is important to first understand what these terms mean.

What is Credit Score?

Your credit score in India is a 3-digit summary that defines your credit history. A credit bureau takes your credit history into consideration and uses its own algorithm to calculate a 3-digit score, generally in the range of 300 to 900. The higher the credit score is, the more responsible you have been with credit in the past. Most lenders in India prefer giving loans to borrowers with a credit score of 700 or above.

What is CIBIL Score?

The full form of CIBIL is Credit Information Bureau (India) Limited. CIBIL is one of the four major credit bureaus in India. The other three bureaus are Equifax, CRIF Highmark and Experian. All four credit bureaus are licensed by the Reserve Bank of India (RBI). The credit score calculated by CIBIL is known as the CIBIL score. So, the only difference between CIBIL and credit score is that credit score can be provided by any of the 4 credit bureaus in India. But only CIBIL provides CIBIL score. A credit score from any of the 4 credit bureaus is equally valid. However, most banks usually prefer CIBIL score.

Difference between CIBIL Score and CIBIL Report

Now that you know what the CIBIL score is, it should not be difficult to understand the CIBIL report. Your CIBIL report is the report created by CIBIL with details of your CIBIL score and debt accounts along with their payments. It contains details such as the loans that you might have taken in the past, Credit Card dues, etc. and how you repaid them. With the help of all this information, CIBIL calculates your CIBIL score.

Apart from the debt related information, it also has your personal details such as your name, address, Permanent Account Number (PAN), contact details, etc. Moreover, everytime you apply for a new loan or Credit Card, the lender informs CIBIL about the same and all such applications are also recorded in your CIBIL report. Just like CIBIL, the other three credit bureaus also offer their respective credit reports.

Credit Score and Loans in India

Before applying for a new loan, it is important for every borrower in India to first do CIBIL score check from the official CIBIL website if they have already taken loans or used Credit Cards in the past. Check the credit score requirements of the borrower and only apply for the loan if you meet the requirements.

If at all your credit report is not up to the mark, try to improve your score first before applying for a new loan to get your loan application approved.

 

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