What is a Cibil Score?
Hello Guys here in this post i am going to tell you about cibil score. In this post I will try to cover as many points as possible so let’s start.
Cibil score is a financial score that calculates the credit worthiness of a customer. The score ranges from A to D, with A being the most creditworthy and C being the least. The higher your cibil grade, the more likely you are to have your debt repaid on time, with low risk of defaulting on payments.
Things like income and debts are taken into consideration when calculating a cibil grade. There’s no official list of what factors go into your grade because it varies depending on which company is doing the calculating, so if you want to know for sure whether or not you qualify for an A rating then it’s best to consult with an expert resource such as this blog post.
Cibil is most commonly used by banks, credit unions and auto lenders to assess customers’ credit worthiness. Credit unions are also able to use cibil categorization as part of their membership selection process.
What is the difference between a FICO score and a cibil score?
There’s no official difference between a FICO score and Cibil. FICO is the most used scoring model in the US and Canada, and both the FICO score and Cibil are calculated using the same formula. While the judging criteria of a FICO score is based on present data, a cibil score is scored using information that has already been collected, making it more accurate. A cibil score can also be used to determine which accounts are in good standing so that you don’t get any unwanted notices on your credit report.
Cibil also follows a much more strict set of rules than other scoring models because banks often use this as a metric to judge their customers, and have the legal power to deny loans or raise interest rates if their grade falls below an A12 or above an F15 .
On the other hand, FICO scoring model is used to decide eligibility for special offers, insurance and other financial products such as mortgages and credit cards.
FICO scores are built from the following 5 factors:
Payment history – 35% (How on time your payments are) Amounts owed – 30% (How much of your credit you have used up) Length of history – 15% (How long you have had a credit file ) New credit – 10% (Using too many new accounts in a short period of time can indicate potential fraud) Types of credit – 10% (Different types of accounts can help show you know how to handle different loans.
Still if you have any doubt feel free to comment down below.