Why be serious about CIBIL?

CIBIL score is a 3-digit numeric summary of your creditworthiness. Now what does that mean? Creditworthiness is a reflection of how you manage money to put it simply. This indicator is used to assess whether you should be given loans or not by the banks. i.e. are you worthy of getting a loan? A CIBIL score ranges from 300–900 with 300 being extremely untrustworthy and closer to 900 means yeah you are good.

CIBIL (Credit Information Bureau Limited) or TransUnion CIBIL as it's now called is a credit rating agency in India approved by the RBI. Its main motive is to track all your loans and credit card repayments. For this, it is helped by the institutions like NBFCs, credit card agencies, banks, etc. These institutions update your usage whereby your credit report gets updated. TransUnion is just one of the 4 CRAs in India. The others are Experian, Equifax, and Highmark.

So how do you get this number? The easiest answer would be to get a loan in fact. Not kidding. A CIBIL score starts when you have a credit history. A credit history starts when you get a loan, a credit card, etc. Since the range starts from 300, most of us believe that the starting score would be 300 but it usually takes around 6 months from your first loan or credit card to prepare your first credit report.