CIBIL or TransUnion CIBIL Limited is India′s oldest Credit Information Company (CIC). CIBIL is an acronym for Credit Information Bureau (India) Limited. Since its establishment the year 2000, CIBIL has been collecting and maintaining records of Indian residents with respect to their loans and credit cards provided by banks and NBFCs in the country. This information is used to generate CIBIL Credit Reports and calculate the credit scores for new loan as well as credit card applicants. This way, CIBIL plays a crucial role in India's financial and loan system. As per the latest records, CIBIL has 2600 members which include India's leading public and private sector banks, financial institutions, housing finance companies and non-banking companies. In 2017, CIBIL launched CIBIL MSME Rank to help lenders assess loan risk against micro, small and medium enterprises.
The CIBIL Score, also known as the CIBIL TransUnion Score, is a 3-digit whole number in the range of 300 to 900 that summarises how well or how poorly you have dealt with loans or credit cards in the past. The higher your CIBIL score, the better your chances of being approved for additional credit in the future.
Recently, RBI has made it mandatory for banks and financial institutions to check CIBIL credit report and score of any individual in order to lend money. Credit report and score basically indicates an individual's financial stability and tells the lenders where that individual will be able to repay the loan on time. This score is calculated by credit bureau after collecting your credit information from member banks and credit institutions on regular intervals. CIBIL is one of the oldest and major credit bureau in India that generates a report along with 3 digit score (from 300 to 900) that defines the credit-worthiness of an individual. If you have been paying the credit bills and loan amount on time, then you will have a higher score. Higher score means that there are more chances of you to get a loan at a considerate interest rate. If you have a low score of say below 650, there are higher chances that your loan application will be rejected. For any individual, it is recommended to check CIBIL score in every 6 months to maintain or improve it, in case the score is low.