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0.45%
Silver₹2,45,576/kg
1.25%
Copper₹6/lb
0.85%
Platinum₹31,714/10g
0.32%
Crude Oil₹82/bbl
2.15%
USD / INR92
0.15%
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0.22%
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0.31%
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Credit Health

Understanding Your CIBIL Score

Your credit score is effectively your financial resume. It dictates whether you can buy a house, finance a car, or secure a business loan. Here is exactly how it works.

FinCalc Pro•5 min read
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What is a CIBIL Score?

The TransUnion CIBIL score is a three-digit numeric summary of your credit history, rating, and report. It ranges from 300 to 900. The closer your score is to 900, the higher the chances of your loan application getting approved.

Banks use this score to evaluate your "Creditworthiness" — essentially, your statistical probability of defaulting on a loan within the next 12 months.

The 4 Factors of Your Score

  • 1. Payment History (35%)Making late payments or defaulting your EMIs has the single biggest negative impact on your score. A 30-day late payment can drop your score by over 50 points instantly.
  • 2. Credit Utilization (30%)This is the ratio of your outstanding credit card balances compared to your total credit limit. You should always aim to keep this below 30%. Maxing out your cards signals financial distress to banks.
  • 3. Credit Age (15%)The longer you have held credit accounts, the better. Never close your oldest credit card, even if you don't use it much, because it anchors the average age of your credit history.
  • 4. Credit Mix & Inquiries (20%)A healthy mix of secured (Home Loan) and unsecured (Personal Loan/Credit Cards) debt is good. However, applying for multiple loans in a short period generates "Hard Inquiries" which will temporarily tank your score.
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How to Rebuild a Bad Score

If your score is below 700, you are likely facing loan rejections or exorbitantly high interest rates. Rebuilding it takes time, but the mathematical formula is simple:

  • Set up Auto-Pay: Never miss a payment date again.
  • Pay down balances: Aggressively pay off credit card debt to drop your utilization ratio below 10%.
  • Get a Secured Card: If you cannot get approved for anything, open a Fixed Deposit (FD) backed credit card to slowly build positive payment history.

Action Step

You are legally entitled to one free credit report per year from the major bureaus. Pull your report today and check for errors—disputing a false late mark can boost your score by 50+ points in 30 days.