Unveil the Key Differences Between Credit Score and CIBIL Score

Confused between credit score vs. CIBIL score? Learn the main differences between these scores and understand why they matter for your financial health.

Want to get a loan, apply for a credit card or secure lower interest rates? A strong credit profile is the key!

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When discussing creditworthiness, two terms that often come up are CIBIL score and credit score.

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While many use them interchangeably, they are not the same. Both impact your financial health, but they have distinct meanings and implications.

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In this guide, you will learn some key differences between credit score vs. CIBIL score. Understanding these differences helps you manage your finances better and improve your chances of getting approved for credit.

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What Is a Credit Score?

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Your credit score is a three-digit number that represents your creditworthiness in the eyes of lenders. It helps financial institutions evaluate the risk of lending you money.

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Your credit history, which includes elements like repayment patterns and the total amount borrowed, determines this score. A higher credit score improves your chances of loan approval and better loan terms.

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Credit bureaus assess your financial behaviour and assign you a score, typically ranging from 300 to 900. While the exact range may vary across bureaus, the closer your score is to 900, the stronger your credit profile.

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Maintaining a good credit history reduces the risk of loan rejection and ensures smooth access to credit when needed.

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What Is a CIBIL Score?

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CIBIL (Credit Information Bureau India Limited) is India’s first credit information company. It collects credit data from banks and financial institutions to generate credit reports and scores for individuals and businesses.

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Now known as TransUnion CIBIL, after being acquired by TransUnion, a global leader in credit and identity management, it plays a key role in assessing creditworthiness.

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Lenders rely on CIBIL’s credit reports and scores before approving loans, credit cards, or any form of credit. Your ability to secure credit depends on these scores, making them crucial for financial decisions.

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What Is the Difference Between Credit Score vs. CIBIL Score?

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The following table shows the difference between credit score and CIBIL score:

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Parameters	Credit Score	CIBIL Score
Meaning	A borrower's creditworthiness is represented numerically based on various factors, such as credit history length, payment record, past credit activity, and credit utilisation.	The Credit Information Bureau (India) Limited (CIBIL) assigns a credit score to evaluate an individual’s creditworthiness.
Authority	Different authorities regulate credit bureaus across various countries.	CIBIL is an authorised credit bureau overseen by the Reserve Bank of India.
Credit Bureau	Various credit bureaus operate in different countries, including Experian, Equifax, TransUnion, and others.	Along with Equifax, Experian, and CRIF High Mark, it is one of the four credit bureaus operating in India.
Calculation	Credit scores are determined based on various factors, such as payment history, credit utilisation, credit mix, credit history length, and newly opened credit accounts.	The calculation is done on the basis of an individual’s credit report provided to CIBIL by different financial institutions.
Score Range	The range is between 300 and 850 or 900, depending on the specific credit bureau.	The range spans from 300 to 900.

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The Bottom Line

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Understanding the differences between credit score vs CIBIL score can help you make informed financial decisions and improve your borrowing experience.

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Both scores indicate creditworthiness, but they differ in scope. A credit score is a general term used worldwide, while a CIBIL score applies specifically to India's credit rating system.

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Monitoring both helps you make informed financial decisions, whether you are applying for credit, securing loans, or getting better interest rates.

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If you want to check your credit score or CIBIL score, you can use the credit checker tool of Jar.

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It provides a quick and easy way to track your credit health, helping you stay informed and make better financial decisions.

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Frequently Asked Question

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1. Are credit scores and CIBIL scores the same?

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No, the credit score and CIBIL score are not the same. A credit score is a three-digit rating provided by different credit rating agencies like CIBIL TransUnion, Experian and Equifax. Specifically, the rating given by CIBIL TransUnion is referred to as the CIBIL score.

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2. Which is more important - CIBIL score or credit score?

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Both CIBIL score and credit score are essential for evaluating creditworthiness. Lenders use them to assess risk and decide loan eligibility. A higher score improves your chances of getting loans with better terms and lower interest rates.

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3. What is a good credit score or CIBIL score?

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A score closer to 900 is considered excellent, as it improves your chances of loan approval with favourable terms. In general, a score above 750 is ideal.