CIBIL Score vs Credit Score: Which one is more important if you want a loan?

If you want a loan, your credit history should be clean. Banks give loans based on Credit Score or CIBIL Score. Be it a personal loan or a credit card, you must have heard the terms credit score and CIBIL score.

You need to understand the difference between these two scores before applying for any loan. Here is complete information about this.

What is Credit score?

A credit score can be said to be a reflection of your credit history. It is the score that determines whether you can be trusted to lend or not.Your credit score is usually calculated based on various factors such as the loans you have taken out in the past, how you have repaid those loans and the amount of outstanding loans.

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Reserve Bank of India has authorized 4 major credit bureaus to provide these credit scores. These are TransUnion CIBIL, Experian, Equifax and CRIF High Mark. They follow their own methods for allocating these marks. They may differ from each other.

What is CIBIL Score?

CIBIL Score is a 3-digit number issued by TransUnion CIBIL, one of the 4 credit bureaus in India. This score usually ranges from 300 to 900. The higher this score, the more likely you are to be trusted to lend. CIBIL score is most popularly used in India.

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It is issued on the basis of a credit information report called CIR. This is a summary of your past debts.

What is the difference between CIBIL score and credit score?

Both CIBIL score and credit score are different from each other. However, both reflect your creditworthiness.So, maintaining a healthy CIBIL and credit score will ensure you get better deals on loans in the future.

If it is more than 700, you will get a loan! CIBIL score is the most common credit score in India. Above 700, you can avail personal loans at low interest rates. Not only that, chances are that your loan applications will be approved faster.Even if you default on a single loan, it can affect your score. So always pay your bills on time.

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