The Ultimate Difference Between CIBIL Score and CIBIL Report

Difference between CIBIL Score and CIBIL Report

While talking about credits and finances, it is quite common to come across terms like credit score, CIBIL score, CIBIL report, and others. However, if you are new to the financial world, and wish to get yourself a credit card or require a loan to start your own business, it is important for you to understand these terms and what role they play when it comes to loans or credit card approvals.

This blog will give you a detailed explanation of the CIBIL score and CIBIL report and the difference between them.

The CIBIL score represents the credit borrowing behaviour of the user. It is generated on the basis of multiple factors like the user’s past payment history, outstanding credit amount, number of due payments, etc. Apart from this, the CIBIL score is one of the key factors that give a detailed analysis of the user’s credit repayment behaviour to the lenders and banks. On the basis of CIBIL score, these institutions then decide whether to reject/approve a user’s loan or credit card application.

Besides the user’s personal information, below is a list of few more things that must be taken into consideration to create a CIBIL report-

  • Loan details and other credit-based information
  • User’s income details
  • Credit card details
  • Credit card cancellation details
  • Total number of hard inquiries

An error-free CIBIL report can improve the CIBIL score; while, on the contrary, a CIBIL report with errors or remarks given by banks, lenders negatively impacts the CIBIL score. It is advised to check the CIBIL report at least twice a year or whatever seems feasible. A detailed report can help to detect issues or errors, if any which can further be used to raise a dispute.

Difference Between CIBIL Score and CIBIL Report

A CIBIL report is created on the basis of the user’s credit-based information, debt, loan amount, and other personal details. It can be said that a CIBIL score is the most important part of a CIBIL report and it cannot be generated without a detailed CIBIL report.

Although a CIBIL score is one of the most important factors affecting the approval/rejection of credit; however, it is not the only factor which is taken into consideration by lenders and banks to accept or reject the applicant’s loan application. A good CIBIL score increases the chances of the loan approval process.

CIBIL score can be further explained as-

  • CIBIL score ranges from 300-900
  • A score above 750 or near to 900 is considered excellent
  • CIBIL score less than 750 is considered fair
  • An applicant with a low CIBIL score can apply for a loan; however, he/she is charged a higher rate of interest on the borrowed amount in comparison to normal credits

Thus, in order to get approved for a loan or a credit card, it is advised to maintain/improve your CIBIL score. The following things should be done by an applicant to improve his/her credit score-

  • Pay off the debt on time
  • Avoid making multiple hard inquiries
  • Do not leave any outstanding balances
  • Resolve errors/comments in the credit report
  • Use your credit utilization ratio wisely
  • Maintain a healthy balance between secured and unsecured loans

What is CIBIL Report?

A CIBIL report, also known as Credit Information Report (CIR) is a blend of user’s loan and credit-related information and other personal details like user’s PAN number, DOB, address, gender, etc. Credit bureaus in the country gather the user’s credit data from the banks, financial institutions and lenders and then create a detailed credit report.

What is a good CIBIL score?
CIBIL score above 750 or closer to 900 is considered best for loan or credit card approvals.
How many times should I check my CIBIL report?
It is advised to check your CIBIL report at least twice a year.
How can I improve my CIBIL score?
Follow the given points to improve your CIBIL score-
  • Pay your debts on time
  • Maintain the right balance between secured and unsecured loans
  • Set reminders to ensure timely payments of credit dues
  • Do not make multiple hard inquiries
  • Avoid leaving outstanding balances
  • Ensure to use credit utilization ratio wisely
  • Check your CIBIL report twice a year
  • Raise a dispute if there are errors in the CIBIL report
What are the factors that affect Credit score?
Factors that affect credit score are-
  • Poor repayment history
  • Outstanding balances
  • Delayed payments
  • Frequent hard inquiries
  • Half settled payments
  • Errors in the credit report
  • High use of credit utilization ratio
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