How is CIBIL Score for Personal Loan Calculated?



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If you are thinking about applying for a personal loan online then the first thing you must check is your CIBIL score. Your CIBIL score or your credit score is the reflection of your creditworthiness. This is one of the most important parameters that a lender checks for approving your personal loan application.

Personal loans are unsecured advances. That’s why your lender relies on your credit score to analyse the risk associated with your profile. Your credit score also influences other crucial parameters related to your loan. This includes the interest rate, loan tenure, maximum loan amount eligibility, processing fees and other loan terms.

Read on to understand how credit bureaus calculate this credit score.

What does Credit or CIBIL score comprise?

A credit score is a 3-digit number assigned to every individual or entity that has availed credit at any time in their life. This number usually ranges from 300 to 900 with the assigned numbers indicating varying parameters of creditworthiness.

In India, there are four major credit bureaus and CIBIL is the oldest credit bureau in India. The credit score assigned by CIBIL is popularly known as the CIBIL score. Most Indian lenders refer to this CIBIL score to make important lending decisions.

Your credit score is influenced by a number of factors. The most important are – your repayment history, regular payment of EMIs, ongoing debts, number of enquiries sent for a personal loan and your overall credit profile.

Read on to understand how is CIBIL calculated for personal loans.

How is Credit Score Calculate?

The calculation of CIBIL/credit score is done on a wide range of parameters that span from repayment habits to behaviours of availing credit and so much more. For accurate calculation of the CIBIL score, the parameters are divided into 4 categories with varying weightage attached to them for credit score computation.

1. Individual’s payment history (30%)

The payment history of an individual carries the highest weightage at 30% in credit score calculation. It is based on your credit history records that relate to repayment behaviours, including whether you have made timely payments of your bills and EMIs or not. Even, partial or full payment of these dues is accounted for and leaves a positive or negative impact on your score.

2. Type and duration of credit availed (25%)

At a weightage of 25%, the mix of credit availed determines how risk-diversified your credit portfolio is. The duration of credit determines for how long your liabilities recur and occupy your finances.

3. Overall exposure to credit (25%)

Another parameter at 25% weightage, is determined by your dependency on credit based on how much of your income is occupied by the repayment liabilities and how much credit you are utilising out of the total availability

4. Additional factors (20%)

Other factors like number of loan applications sent within a short duration, hard enquiries sent on your profile, errors or omissions in recording and such factors contribute to the remaining 20% weightage of credit score calculation.


Adopting a few tips and techniques in your credit practices and behaviour and disciplining your financing go a long way in leaving a positive impact on your credit score. It is ideal to take these necessary steps at least 6 months before applying for your personal loan online.

This is because any changes in your credit behaviour and profile will take time to be collected by the credit bureaus from respective financial institutions and would thus take time to reflect on your score. Once you have already availed a personal loan, you must also make sure to make timely repayments. Avoid delaying your loan repayment even by a single day as it can result in loan penalty and can negatively impact your credit score.

To avoid missing your loan EMIs you can opt for the auto-debit facility. In this, the loan EMI amount is automatically deducted on the due date and is paid to the lender. You just have to maintain sufficient balance in your account. If you avail a personal loan through a money loan app, then the app will send you constant reminders on your phone to prevent you from missing the due date.

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