What is a good CIBIL score to get a loan?
A CIBIL score of 750 or above is considered excellent and gives you the best chance of loan approval at the lowest interest rates. Most banks and NBFCs approve loans for scores above 700. Scores between 650–700 may get approved but at higher rates. Below 650 is risky for lenders — you may get rejected or need a co-applicant. Some NBFCs approve loans for scores as low as 600, but at very high interest rates (20%+).
How is my CIBIL score calculated?
TransUnion CIBIL uses a proprietary algorithm that weighs: Payment History (30%) — whether you pay EMIs and credit card bills on time; Credit Utilisation (25%) — how much of your credit limit you use (keep below 30%); Credit Duration & Type (25%) — age of accounts and mix of secured/unsecured; New Inquiries (10%) — multiple loan applications in short time; Credit Mix (10%) — having both secured (home loan) and unsecured (credit card) credit.
What if I have no credit history (NH/NA score)?
If you've never taken a loan or credit card, your report will show "NH" (No History) or "NA" (Not Applicable). This is different from a bad score — you simply have no credit track record. To build credit: (1) Apply for a secured credit card (FD-backed) — easiest approval, (2) Take a small personal loan and repay on time, (3) Become an authorised user on a family member's credit card, (4) Pay utility bills via credit card. Within 6–12 months of responsible use, you'll have a score of 700+.
Will checking my credit score affect it?
No — absolutely not! When you check your own credit score (self-monitoring), it's called a "soft inquiry" and has zero impact on your score. You can check as often as you want without any harm. Hard inquiries (when a bank/lender checks your score during a loan application) do have a small negative impact — each hard inquiry can reduce your score by 5–10 points. That's why applying to multiple lenders simultaneously is harmful.
How long does it take to improve a low score?
Timeline depends on what's hurting your score: Missed payment: Effect reduces after 12 months, disappears from report after 7 years. High utilisation: Fix this month, score improves next update (30–45 days). Multiple hard inquiries: Effect fades in 12 months. Settled/written-off accounts: Impact lasts 7 years. With consistent positive actions (pay on time, reduce utilisation), most people see 50–100 point improvement in 3–6 months. A severely damaged score (below 500) can take 1–2 years to rebuild significantly.
Can errors in my CIBIL report bring down my score?
Yes! Credit report errors are surprisingly common and can wrongly damage your score. Common errors include: closed accounts showing as open, correct payments marked as late, duplicate accounts, outdated information, accounts that aren't yours (identity fraud). If you find errors: (1) Raise a dispute on the CIBIL website (www.cibil.com), (2) Contact the lender who reported incorrect data, (3) CIBIL investigates within 30 days and corrects verified errors. This is why checking your score and report regularly is important!
What happens to my score when I close a credit card?
Closing a credit card can actually hurt your score in two ways: (1) It reduces your total available credit limit, which increases your credit utilisation ratio. If you had ₹1 Lakh limit and used ₹25,000 (25% utilisation), and close a ₹50,000-limit card — your utilisation jumps to 50%! (2) If it was your oldest card, it reduces your average credit age. Before closing a card: pay off the balance, consider just keeping it inactive, and never close your oldest credit card.
What is credit utilisation and why does it matter?
Credit utilisation is the percentage of your total credit card limit that you're currently using. Formula: (Total outstanding / Total limit) × 100. Example: If your total credit card limit is ₹2 Lakh and you've spent ₹60,000, your utilisation is 30%. Best practice: Keep utilisation BELOW 30% for a healthy score. Above 50% utilisation signals financial stress and hurts your score significantly. To lower it: pay off balances before statement date, request a credit limit increase, or spread spending across multiple cards.