Cibil Report and its importance

Cibil is a 3 digit score given to you based on your Credit history and derived by the active loans and enquiries on loans that your have. The score ranges from 300 to 900, with 900 being the highest & 300 being the lowest.

Also if a person has not taken any loans (Home loans, Credit card, Personal Loan) then he can have a score of -1, which is not a negative score but kind of neutral score.

In today times, Cibil has become the primary requirement for Banks & Financial institution to take loans. You might have good Salary and overall good profile but Banks can still refuse you a loan if you have a Low Cibil score.

Factors affecting Cibil Score

Payment History -

  • Making Late Payments for existing loan or defaulting on your EMI consistently will negatively impact your score.
  • Say you have a Home Loan EMI of Rs 20000/- to be paid on 5th of each month, and if you fail to make that EMI payment of Rs 20000/- on 5th, your Cibil score will go down because you have not made payment on time. More the time you take to make a payment, more the score will get negatively impacted.

Multiple Enquiries -

  • If you keep on applying to multiple banks and lending institutions for any product say Home Loan, Personal Loan, Credit card etc, then lenders will see you with caution as this behavior indicates that  your Debt requirement has increased. Again this affects your Cibil in negative manner.

High Credit Utilisation -

  • Say you have a Credit Card with a limit of Rs 1lakh and you consistently use it for more than 30% limit which is 30000. Lenders see this behavior with caution and this affects your Cibil negatively

  • Here you can have 2 different credit card with different Banks and use it not more than 30% of individual limit.

Credit Mix -

  • Having a balanced mix of Secured Loans and Unsecured Loans tends to affect the Cibil score positively

  • Secured Loans- Home Loans, Mortgage Loans, Vehicle Loans

  • Unsecured Loans- OverDraft limit, Credit Cards, Personal Loans, Business Loans

How can you improve your Cibil Score?

  • On time Payment of EMIs – For all your current active Loans, make the EMI payments on time!

  • Avoid overutilization of Credit limit – For Credit Cards/ Over draft limits, use the balances cautiously and under the given limit


  • Maintaining Credit Mix – Too many unsecured loans (Personal Loans) are viewed negatively. Have a balance mix of both type of loans ie Secured and Unsecured


  • Avoid applying at Multiple banks simultaneously – Do not apply blindly at multiple banks for any products. Multiple enquiries in your Cibil Report affects your score negatively.


  • Avoid being Guarantor – Many times, we become a Guarantor to friends/ relatives’ loans and in future when they default on EMIs it not just affects his/her score but also your Cibil score as a Guarantor!


  • Have a Loan Consultant – who can guide you time to time about changes in Cibil requirements and how you can keep your score improving.

We at All About Loan, are a team of experts and ex-bankers who have been serving numerous clients. For your loan queries, you can connect with us on below details.
+91 70660 10609    

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