CH 9: Roles and Functions of CIBIL


CIBIL stands for Credit Information Bureau (India) Limited. It is India’s first Credit Information Company, which was founded in August 2000. The member bank and all the credit institution submit their records to CIBIL on monthly basis. The information received from banks and credit institutions would be used to create Credit Information Report and Credit Score that are provided to credit institution to help in evaluation and approving loan applications.


The credit score ranges from 300 to 900. The closer you are to 900, the more confidence the credit institution will have in your ability to repay the loan and hence, the better the chances of your application getting approved. Anything above 750 is considered a good credit score. All banks /NBFCs usually look at the credit score as one of the many checks they do before advancing a loan.

In case you have a low credit score, all you have to is to improve your credit score by following a few steps.

  • Making payments for your loan dues on time
  • Maintaining a balance between secured and unsecured loans.
  • Reducing the number of loans you borrow in a particular year.
  • Ensuring your debt-to-income ratio is low.

For example, if X has taken a personal loan with one bank and paid his EMIs promptly but defaulted on a home loan taken with another bank, CIBIL will collate both these information and provide the member bank with a credit report.


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