Credit Score vs CIBIL Score: What’s the Difference?

Credit Score vs CIBIL Score:

Many people often get confused when it comes to understanding the difference between a Credit Score and a CIBIL Score. While both terms are used in financial discussions, they are not exactly the same.

Credit Score vs CIBIL Score:

What is a Credit Score?

A Credit Score is a 3-digit number that represents your creditworthiness based on your credit history. It typically ranges from 300 to 900. This score is calculated by credit bureaus based on several factors such as loan repayment history, the amount of debt you have, and your overall credit utilization ratio. Generally, a score above 700 is considered good, making it easier to obtain loans.

What is a CIBIL Score?

On the other hand, CIBIL stands for Credit Information Bureau (India) Limited, one of the four major credit bureaus in India. CIBIL is widely regarded as the most important bureau when it comes to credit scoring. It provides CIBIL Scores which also range from 300 to 900. However, it’s essential to note that CIBIL Score is simply a type of Credit Score.

The other three credit bureaus in India are Equifax, CRIF Highmark, and Experian, and each of these gives their own version of the credit score. While all these bureaus use similar methods to calculate the score, CIBIL Score is the most commonly used by banks and financial institutions in India.

Key Differences:

1. Source of Scores:

CIBIL Score is specifically provided by CIBIL.

Credit Score can be provided by any of the four credit bureaus (CIBIL, Equifax, CRIF, and Experian).

2. Usage:

Many banks and lenders prioritize the CIBIL Score when evaluating creditworthiness, even though they consider scores from other bureaus too.

3. Factors Influencing the Score:

Both scores take into account factors like timely loan repayment, credit utilization ratio, and credit history.

In summary, while CIBIL Score is one type of Credit Score, the latter can come from various credit bureaus. However, CIBIL scores are considered more significant by most lenders in India.

For financial advice, it’s always best to

consult experts in the field.

Also Read:Porridge vs Overnight Oats: Which One is Good for Your Health?