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CIBIL Score Vs Credit Score – What’s the Difference?
Posted on Tuesday, August 27th, 2024 | By IndusInd Bank
Whether you want to access loans, apply for credit cards, or get low interest rates, a good credit profile is essential. For credit profiles, two terms you would have come across are ‘CIBIL score’ and ‘credit score’.
While people use both the terms interchangeably, they have different meanings and implications. However, both play a vital role in determining your financial health. Hence, knowing the difference between a CIBIL score and a credit score is crucial.
Understanding CIBIL Scores and Credit Scores
To understand credit scores vs CIBIL scoresin a better way, we must first look at CIBIL in some detail.
What is CIBIL?
The Credit Information Bureau (India) Limited, or CIBIL, is India’s first and most reliable credit information company. It collects and maintains credit records of individuals and businesses, including loans and credit card payments. Member banks and financial institutions provide these records.
What is a CIBIL Score?
The CIBIL Score is a three-digit number that ranges from 300 to 900. It represents an individual’s creditworthiness based on their credit history. It is taken from the credit report maintained by CIBIL and is the most widely recognised credit score in India. A higher CIBIL score implies better credit health. It increases the likelihood of loan approval and favourable terms.
What is a Credit Score?
A credit score is a general numerical representation of an individual’s creditworthiness. It is calculated based on the individual’s credit history and financial behaviour.
A CIBIL score is a kind of credit score. However, there are other credit bureaus in India, such as Experian, Equifax, and CRIF High Mark, who provide their own credit scores. These scores may vary a bit because of different scoring models and algorithms used by each bureau.
Hence, the major difference between a CIBIL score and a credit scoreis that the former is CIBIL-specific, while the latter is general. Let’s explore some other differences as well.
Difference Between CIBIL and Credit Scores
The following table explains the difference between a CIBIL score and a credit score:
| Parameter | CIBIL Scores | Credit Scores |
| Scope and Providers | Provided by the Credit Information Bureau (India) Limited (CIBIL). | A general term referring to scores provided by various credit bureaus, including CIBIL, Experian, Equifax, and CRIF High Mark. |
| Scoring Range | Ranges from 300 to 900. | Ranges from 300 to 850, though it can vary depending on the credit bureau. |
| Usage and Recognition | Widely recognised and used in India, especially by lenders. | All credit scores are used to gauge creditworthiness. However, lenders in India prefer the CIBIL score. |
| Calculation Model | Based on CIBIL’s specific algorithm and the credit report it maintains. | Each credit bureau has its own algorithm and methodology. |
| Report Contents | Derived from the CIBIL report. It also includes detailed credit history, outstanding balances, payment behaviour, and more. | Derived from the credit report of the respective bureau. It contains similar details but may have slight differences in data representation. |
Also Read: People with a Low CIBIL Score Can Still Get a Credit Card- Here’s How
Conclusion
While both scores serve as indicators of creditworthiness, knowing the nuances of a credit score vs a CIBIL score can help you navigate the borrowing landscape with ease.
Ready to improve your credit profile? Consider applying for a Credit Card with IndusInd Bank. We offer a diverse range of Credit Cards like the Platinum RuPay Credit Card for seamless UPI transactions, the Nexxt Credit Card with interactive elements, the EazyDiner Credit Card for culinary aficionados, the Avios Visa Infinite Credit Card for frequent travellers, and more.
Browse through our website to explore various Credit Cards and find the one that best suits your needs. Apply now for Credit Card and enhance your financial journey with IndusInd Bank!
Disclaimer:
The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.
