Difference Between Cibil score vs Credit score: Which one is more important & How to increase

Difference Between CIBIL Score & Credit Score: Credit score and CIBIL score are related to credit rating. Lenders assess risk and, based on these scores, determine whether you qualify for a loan with appropriate terms and interest rates. Reduced risk is measured by a higher score, enabling one to qualify for favorable loan terms and lower interest rates. Good credit profiles and confirmations usually require a CIBIL score above 750 or equivalent. Prioritize maintaining a good repayment history by paying bills and EMIs on time to maximize both scores, avoiding excessive use of loans, equitable distribution of unsecured and secured loans, and payment of obligations and debts. In this article, we will discuss more about the CIBIL score and credit score, including differentiation and other details.

Also, both these scores can be gradually improved through regular credit report reviews, limiting credit checks, and diversifying your credit score. CIBIL score is a credit score by TransUnion Credit Information Bureau India Limited, a credit agency that only accounts for India. Credit scores issued by credit agencies, including Credit Information Bureau India Limited, Equifax, Experian, and CRIF Highmark in India, are called “credit scores.” CIBIL scores are calculated based on credit information provided by financial institutions, lenders, and banks and submitted only on the basis of accounting in the Credit Information Bureau India Limited office. Although banks typically use credit history, payment history, credit utilization, and credit inquiries to determine credit scores, the exact method of calculation can vary.

The CIBIL score fluctuates between 300 and 900, with a score below 500 indicating poor credit score, below 750 indicating average, and above 750 indicating excellent. If you score above 750, financial institutions, including banks, will approve your loan immediately, with no complications, and they are most likely to send the money via your respective bank account. The range of credit scores from different agencies can vary, for example, from 300 to 999 or 300 to 850, depending on the credit agency. The most commonly used and approved credit score by lenders in India is CIBIL accountability. Lenders may use other credit labels; however, the CIBIL score is the main metric calculated. Below is the overview table that you must know.

Difference Between CIBIL Score & Credit Score – Overview

Score Type	CIBIL Score and Credit Score
CIBIL Score Organization	Credit Information Bureau India Limited
Country	India
Credit Score Organizations	CIBIL, Equifax, Experian, and CRIF Highmark
CIBIL Score Range	300 to 900
Credit Score Range	Varies
CIBIL Score Importance	Determines Loan Eligibility and Terms
Credit Score Importance	Assesses Creditworthiness for Loan Approvals
Score Benefits	Instant Loan Approval from Financial Institutions
Good CIBIL Score	750 to 900
Good Credit Score	700 and Above
CIBIL Score Checking Website	Visit CIBIL’s Official Website
Official Website (CIBIL)	https://www.cibil.com/
Credit Score Checking Website/App	Visit CRED application
Other Details	Check Article

As we have already mentioned earlier, the CIBIL score and credit score are not the same. The three credit rating scores provided by lending organizations, including CIBIL, TransUnion, Experian, Equifax, and others, are credit scores. CIBIL TransUnion offers a credit rating called the CIBIL Score. To get a good CIBIL score, you need to score at least 750, and to get a good credit score, you need to score at least 700. Overall, the CIBIL score range begins from 300 to 900, and the credit score range may vary depending on the lenders. The importance of the CIBIL score is that it determines loan eligibility and terms, whereas on the other hand, the importance of the credit score is that it assesses creditworthiness for loan approvals from banks or any other financial institutions. If you want to apply for a loan, whether it is personal, home, or any other loan, then it is important for you to secure a very good or excellent CIBIL or credit score. You can check these scores from the website or applications. CIBIL scores can be checked on the CIBIL website, and credit scores can be checked on various applications, including the CRED application.

Difference Between CIBIL Score & Credit Score – Difference

Following are the difference between CIBIL Score and Credit Score that you are required to know in detail, one by one:

1. Meaning

One of the ways in which CIBIL determines whether a person takes a loan is by assigning a credit score.

The length of time a borrower has borrowed, the frequency and quantity of payments, and the amount of credit used are factored into the calculation of a borrower’s creditworthiness.

2. Score Range

The CIBIL score ranges from 300 to 900, where 300 is the lowest and 900 is the highest.

Credit score ranges may vary depending on the lender or any financial institution, including banks.

3. Credit Bureau

CIBIL Score has four credit bureaus, and the main credit bureau is Credit Information Bureau India Limited, or CIBIL.

Credit Score has several credit bureaus, and some of them include Equifax, Experian, TransUnion, and so on.

4. Authority

CIBIL is regulated by the Reserve Bank of India (RBI) and functions in India itself.

Credit bureaus are regulated by several authorities in different parts of the world.

Difference Between CIBIL Score & Credit Score – How to Increase CIBIL Score and Credit Score?

Following are the strategies that you should know in detail to improve your CIBIL score and credit score:

• Maintain good credit by paying all bills on time, including EMIs and credit card balances.
• Be sure to check your credit report frequently for errors or incorrect requests. File arguments to resolve any inconsistencies.
• You need to have a combination of secured and unsecured loans to show that you own your money and boost your credit score.
• Keep the difficulty of tests to a minimum, as asking too few questions can adversely affect the results.
• Keep the percentage of loan servicing down through equity as an indicator of credit efficiency.

Frequently Asked Questions – Difference Between CIBIL Score & Credit Score