Understanding the Factors That Influence Your CIBIL Score
Published on December 11, 2024 • 4 min read
Your CIBIL score is a three-digit numerical summary of your credit history, ranging from 300 to 900. When applying for business or personal loans, this score acts as the first filter. A higher score not only ensures rapid approval but also gives you leverage to negotiate lower interest rates.
1. Repayment History (30% Impact)
The most critical factor is how consistently you pay your EMIs and credit card bills. Even a single delayed payment (a standard 'days past due' blip on your report) can significantly drag down your score. Consistent, on-time payments are non-negotiable.
2. Credit Utilization Ratio (25% Impact)
This refers to the amount of credit you are using out of the total limit available to you. Maxing out your credit cards or overdraft facilities signals to lenders that you are credit-hungry or cash-strapped.