how Is the cibil score calculated

How Is The CIBIL Score Calculated? – Loaney

If borrowing money is on your list and you have been looking up the basics of borrowing a loan in India, you might have come across the term CIBIL scores or credit scores or credit reports. Loan borrowing and getting the required amount as per your needs has become easier than ever and more people are opting for loans from banks and money lending platforms rather than borrowing money from local money lenders or even their friends and relatives. While loans these days are more accessible for all, the moneylender or bank or any financial institution needs to ensure that the client is not posing a risk for them. They need to know that the borrower is worthy of borrowing a loan and is capable of repaying the amount with the interest. The borrower must have a good track record of credits and loans to let the lender be sure of their willingness to pay the loan. 

This is where your credit history and CIBIL score come into play. These scores are an important point in the eligibility criteria to qualify for a loan in India. If you are wondering what exactly this score is, what is the credit report or how is CIBIL score calculated and the credit report drafted, then you have landed at the right place. This article is the ultimate guide on CIBIL scores and how CIBIL scores online calculators. In this article, we will be talking in detail about CIBIL scores, a good CIBIL score, CIBIL score range, how to calculate CIBIL score for a personal loan, and other topics related to credit reports and CIBIL score. By the end of this article, you will know how to calculate a free CIBIL score and be ready to apply for a loan if you qualify for the same. 

What is Loaney? & What are its Benefits?

Personal loans are a type of loan that can be borrowed by an individual without submitting collateral. Hence this type of loan is also called unsecured debt. A personal loan is usually offered at low-interest rates and for shorter tenures of repayment, the applicant does not need much paperwork or documentation to apply for this loan and in most cases, no guarantor is required. The eligibility criteria of qualifying for this type of loan is simple and the borrowers need not specify the reason for borrowing the loan. The amount borrowed as a personal loan can be used for a variety of purposes. Personal loans are preferred by most people because they can be applied for online, the approval takes only a few minutes and most online lenders do not ask for the applicant’s CIBIL score. This removes the worry of knowing how to calculate CIBIL scores for a personal loan. 

If you are looking forward to borrowing a personal loan online, you can choose from a variety of platforms. One of the best options for you would be Loaney. You must be wondering what Loaney is and how is it different from other platforms. Loaney is an online platform that offers personal loans without asking for a CIBIL score. The loan is offered at low-interest rates and can be repaid in two months. You do not need to submit collateral or present a guarantor on this platform. The documents you will need are your PAN card, Aadhar card linked with your mobile number, bank account internet banking facility, and a picture of yourself. Within a few clicks, you can avail of a personal loan from the comfort of your home. You need to fill in the online application form with genuine details and the loan approval procedure will take place within the next few minutes. The advantages of this platform are that you do not need to submit your CIBIL score and the platform ensures 100% confidentiality of your data. 

What Is The CIBIL Score?

Let us begin this guide on calculating CIBIL scores by understanding what CIBIL is, what it does, and what the CIBIL score is. 

The TransUnion CIBIL Limited is a credit rating agency in India. Previously it was known as the Credit Information Bureau India Limited. As a credit rating agency, TransUnion CIBIL Limited assigns the CIBIL scores to individuals and organizations. The scores are assigned based on the record of credit-related activities and loans of the person or company involved. The TransUnion CIBIL Limited maintains a detailed record of all these activities and hence the CIBIL score or credit scores assigned by this agency is a reflection of your credit records and a summary of all your previously borrowed credits and loans. 

The CIBIL score or the credit score is a three-digit number. The CIBIL score range is from 300 to 900. Further, we will look at how the CIBIL score is calculated, the CIBIL score calculators online, and a good CIBIL score. 

How Is The CIBIL Score Calculated?

CIBIL score is a major factor that determines your qualification for applying for a loan in India. So the applicants need to know how the CIBIL score is calculated and then work on those areas to build and maintain the required CIBIL score. 

The TransUnion CIBIL Limited calculates and assigns the CIBIL score of the individuals and organizations by assessing certain aspects of their credit activities and loans. After considering these factors, the CIBIL scores are assigned. The factors that influence the calculation of the CIBIL score by TransUnion CIBIL Limited are as follows:

  • Payments History of the Applicant: the first and most important factor that affects your CIBIL score is your payment record. This contributes to 30% of your CIBIL score. Timely payments, no balance credits, and repayments of debt within the stipulated time frame can be beneficial for a high CIBIL score. 
  • Credit Utilization Ratio: Also known as Credit exposure, this factor is the next most important aspect that highly influences the calculation of your CIBIL score. The credit utilization ratio constitutes 25% of your CIBIL credit score. The credit utilization ratio refers to the amount of credit borrowed to the proportion of the credit limit available to the borrower. Your credit utilization must not be higher than 30% for a good CIBIL credit score. 
  • Type of Credit taken, Duration of Credit, and Balance of Type of Credit: Your loan borrowing history or credit history too is important for the calculation of the CIBIL credit score. This lets the lender know the duration for which you have known to handle credits. There must also be a balance between the unsecured and secured debts that you have taken. This also impacts the CIBIL credit score. This factor contributes to another 25% of the CIBIL score. 
  • Hard Enquiries: When you apply for a loan or a credit, the lender enquires about you. This inquiry is also recorded as a credit-related activity for CIBIL score calculation. When the inquiry is unsuccessful, it is called a hard inquiry and this impacts your CIBIL score. This factor accounts for 20% of your CIBIL credit score. 

Now that we know how the CIBIL score is calculated, we must take a look at what the ideal CIBIL score is and how can CIBIL score be checked in India. 

Ideal CIBIL Score Ratings For Different Loans In India

As mentioned previously, the CIBIL credit score is a three-digit numeric score. The CIBIL score range is from 300 to 900. A score of 750 and above is considered a good score for qualifying for getting a loan approved. Anything below it is not a very good score if you are looking forward to applying for a loan. Having a low CIBIL score does not necessarily mean that you will not be able to get your loan application approved. It simply means that the application procedure might be more difficult and you might have to pay a higher rate of interest in case the application gets approved. The ideal score for different types of loans varies from one type to another. Let us take a look at the required CIBIL credit score for the different types of loans in India. 

  • Home Loan: 650 and above
  • Car Loan: 700 and above
  • Business Loan: 700 and above
  • Loan against Property: 650 and above
  • Gold Loan: CIBIL score is not a requirement.
  • Personal Loan: 700 and above

How To Check CIBIL Score Online?

Up till now, we have looked at how the CIBIL score is calculated and what a good CIBIL score is. It is now time for us to look at how to check our CIBIL score online. You can easily check your free CIBIL score by using CIBIL score calculators online or you can follow these few easy steps for the same.

  • Visit the official website for checking the CIBIL credit score. The following is the website for this purpose:
  • Choose the ‘Get Your Credit Score’ option. Or you can select the ‘Check my CIBIL score’ option.
  • Select the subscription product as per your requirement. 
  • Fill in your identity proof and other details as required.
  • Choose the ‘Proceed to Payment’ option.
  • Complete the payment for the same. 
  • After this, your credit report and CIBIL score will be emailed to you. 

By following the above-mentioned steps, you can easily get a copy of your credit report and CIBIL scores on your registered email ID. you must keep a check on your CIBIL score to ensure that there is no error in the same and also keep a track of your scores. 


1. How CIBIL score is calculated in India?

CIBIL score is calculated in India by TransUnion CIBIL Limited. This agency considers a few major factors like payment history, credit exposure, type of debts, and hard inquiry to calculate the CIBIL credit score.

2. How to Check CIBIL Score by PAN Card?

  • Visit the official website for checking the CIBIL credit score. The following is the website for this purpose:
  • Choose the ‘Get Your Credit Score’ option. Or you can select the ‘Check my CIBIL score’ option.
  • Fill in your PAN card details.
  • Select the ‘Submit’ option.
  • Select the ‘Proceed to Payment’ option.
  • Complete the payment for this request.
  • After this, you will receive your CIBIL report via email on your registered email ID.