What is a Credit Score?

• Repayment History: Making timely repayments improves your credit health and in turn your credit score, thereby making it easier for you to get loans and cards in future.
• Credit Utilisation Ratio: Credit utilisation ratio is the percentage of available credit you are currently using. An applicant with a low credit utilisation ratio reflects a healthy credit behaviour and hence a healthy credit score.
• Credit Age: Credit age shows the period for which the bureau has your credit record. It helps them assess your repayment behaviour and thus the risk associated in approving your credit application.
• Credit Mix: A credit mix shows different credit accounts in your credit profile. It helps lenders assess how well are you managing multiple credit products, thereby reflecting your overall financial discipline.
• New Enquiries: Multiple enquiries (hard enquiries) in a short span indicate financial stress and can lower your credit score. Avoid applying for multiple credit options in a short span.

• Credit bureaus collect the financial information of applicants and generate a credit report that determines their credit score.
• Lenders fetch the applicant’s credit report from the credit bureaus while assessing their loan application.
• The applications for loans and cards are approved depending on the credit score and other factors.
• Applicants with a higher credit score have higher chances of approval.

• Make timely repayments.
• Keep your credit utilisation low.
• Avoid multiple loan applications in a short span.
• Maintain a healthy credit mix.

How is a CIBIL Score Calculated?

A CIBIL score is calculated in the following manner:

• All the credit bureaus follow different scoring models to calculate the credit score of individuals.
• A CIBIL score is calculated based on a complex algorithm that factors in your timely repayments, credit utilization ratio, number of credit enquiries made, and the length of the credit history.
• The CIBIL score is refreshed on a weekly basis.
• The defaults and timely repayments reflected in your credit report might impact your credit score.

Benefits of a Strong CIBIL Score

Below-mentioned are the benefits of a strong CIBIL score:

• A strong CIBIL score gives access for better financial opportunities.
• It increases the chances of approval for future loans and credit cards.
• Applicants with a strong CIBIL score might be offered lower interest rates and higher loan amount.
• Such applicants might also eligible for pre-approved offers for loans and premium credit cards.

How to Check a CIBIL Score for Free?

You can check your CIBIL score for free on the official website of CIBIL. Alternatively, you can also visit Paisabazaar app to check your CIBIL score for free in the following manner.

• Login to Paisabazaar app and go to the dashboard.
• Click on “Credit Score” icon at the bottom of the app.
• Click on CIBIL to see your CIBIL score on the screen.

Likewise you can click on Experian, Equifax and CRIF High Mark to get the credit scores from respective credit bureaus.

RBI Guidelines on Credit Score from July 1st, 2026

RBI has directed bureaus to comply with certain rules for credit score starting July 1st 2026.

• Weekly credit score updates - The credit score will be updated every week instead of the monthly cycle. Thus, your repayments or defaults will be reflected faster, improving credit visibility for both the borrower and the lender. This has made credit monitoring easier, facilitating early warning signals to the borrowers.
• Transparency - RBI has instructed the lenders to specify the actual reason for the rejection of loan and credit card applications, and that the same should be reflected in the credit report.

Read More: Reserve Bank of India (Credit Information Companies) Amendment Directions, 2025