Cibil Score Vs Credit Score: Is There A Difference

Cibil Score Vs Credit Score: Is There A Difference

Amidst all the financial jargon, two terms that often lead to confusion are ‘CIBIL Score’ and ‘Credit Score’.

Both appear similar, and many use them interchangeably. But is that accurate? Let’s delve deeper and untangle the intricacies of the two and understand their implications on your financial life.

What is CIBIL Score?

TransUnion CIBIL Score, more commonly known as CIBIL score, is a three-digit numeric summary of an individual’s credit history.

It is an assessment made by TransUnion CIBIL Limited, one of India’s leading credit information companies. This score ranges between 300 and 900, with a score closer to 900 considered excellent.

Several factors influence your CIBIL score:

  • Repayment history: This accounts for a significant part of your CIBIL score. A history of timely repayments will have a positive impact.
  • Credit utilisation ratio: This is the proportion of your credit limit that you’re using. A lower ratio is favourable for a good CIBIL score.
  • Length of credit history: The duration for which you have been using credit also contributes to your score. A longer credit history, if managed well, can boost your score.
  • Credit mix and new credit: A balanced mix of secured (like home loans and auto loans) and unsecured loans (like credit cards and personal loans) can be beneficial.

In India, your CIBIL score plays a pivotal role when you apply for a loan or a credit card. Most banks and financial institutions check your CIBIL score before approving your credit application.

What is a Credit Score?

While the term ‘credit score’ is often used interchangeably with CIBIL score, it’s important to note that not all credit scores are CIBIL scores. A credit score is a broader term.

A credit score is a numeric representation of your creditworthiness, similar to a CIBIL score. But this score can be issued by several credit bureaus, not just CIBIL.

Besides CIBIL, India has three more credit information companies – Experian, Equifax, and CRIF High Mark.

The factors influencing your credit score are similar to those impacting your CIBIL score, including:

  • Payment history: Making payments on time contributes positively to your credit score.
  • Total amounts owed: The amount of debt you owe impacts your score. It’s beneficial to keep this number as low as possible.
  • Length of credit history: A longer credit history with a good repayment record helps improve your score.
  • Types of credit in use: A diverse set of credit accounts (credit cards, retail accounts, instalment loans, mortgage) is beneficial.
  • New credit: Opening several new credit accounts in a short period can negatively impact your credit score.

Like the CIBIL score, your credit score from any bureau is critical to a lender’s decision-making process. However, different lenders might prefer scores from different bureaus.

The Difference Between CIBIL Score and Credit Score

Despite being similar, the primary difference between a CIBIL score and a credit score lies in the issuing authority.

But there are other differentiating factors as well:

Reporting Agency:

The CIBIL Score is a specific type of credit score reported by TransUnion CIBIL Limited, one of the four credit bureaus operating in India.

On the other hand, a Credit Score could be issued by any of the four credit bureaus – TransUnion CIBIL, Experian, Equifax, and CRIF High Mark.

Each of these bureaus has its data collection methods, scoring algorithms, and reporting styles. So, while you have a single CIBIL Score from TransUnion CIBIL, you could technically have four different credit scores, one from each bureau.


Each credit bureau uses a slightly different methodology or algorithm to calculate the credit score based on the collected information.

As a result, your CIBIL Score might be slightly different from your credit score from Experian, Equifax, or CRIF High Mark, even though all these scores are based on the same basic factors such as repayment history, credit utilisation ratio, length of credit history, credit mix and new credit.

Recognition by Lenders:

Not all lenders rely on the same credit bureau for credit scores. Some lenders may use the CIBIL Score for their credit decisions, while others may prefer the credit score from Experian, Equifax, or CRIF High Mark.

This preference often depends on the lenders’ past experiences and their trust level in the respective credit bureau’s scoring system.

Basis of Differentiation:

The ‘basis of differentiation’ is a point that further accentuates the differences mentioned above. It’s about how different factors, such as the reporting agency, the scoring methodology used, and the recognition by lenders, differentiate a CIBIL Score from a Credit Score.

Now that we understand the differences, the question that often arises is: what is a good credit score? Generally, most lenders consider a score above 750 (out of 900) good, whether it’s a CIBIL score or a credit score from any other bureau.

We hope now you know what a good credit score is.

Read More: Interest Rates and Terms: Personal Loans Tailored for Women

Final Word

While the terms ‘CIBIL Score’ and ‘Credit Score’ are often used interchangeably, they are not exactly the same.

The key differentiator is the reporting agency, though other methodological differences and lender preferences also exist. Both scores, however, serve a similar purpose – to provide lenders with an indication of your creditworthiness.

Regardless of whether you’re considering your TransUnion CIBIL score or a credit score from another bureau, maintaining a score above 750 is generally beneficial for your financial life.

Remember, understanding these scores and their nuances can go a long way in helping you manage your finances better.

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