Credit Score (CIBIL) Formula Revealed

[Shraaj]

How CIBIL Score is Calculated in India ?
Check CIBIL Score formula & learn how does it calculated.

Now, This is the Ratio, that our Credit Score comes from and has an Impact on Gaining and Losing Credit Score in Points.

1. PAYMENT HISTORY-

This is the Most Important Factor, Now see the Parameter/Table

Now, You Can ADD THE POINTS - Eg-

1. If you have just recently paid like 0-4 months then add 15-25 Points.

2. If there is no delay in payment then add 85-95 Points

3. No Bankruptcy - Add 75-85 Points

Now, See even if you don't pay the bank/NBFC then also you will get a score but see the points gap,



2. DEBT BURDEN/CREDIT UTILIZATION-

Now, See if you don't have any burden then also point score will be less or even if you have heavy debt burden then marks will be deducted or less score. So, I will add 20-29% which is 145-155 points along with previous points.

3. LENGTH OF CREDIT HISTORY-

The most important thing look at the points in increasing order along with years,so better to keep our old products active.

Add No.of Months like which is the longest credit report product for you mine is in 12-23 months, so I will add 105-115 points with the previous one. (It can be seen in the cibil report or directly in OneScore App)

4.RECENT SEARCHES FOR CREDIT/CREDIT ENQUIRIES-

Now, See How Many Enquiries have you made in CIBIL in the Last 6 Months that also impact, Add this previous one.

5. TYPES OF CREDIT/MIXTURE OF CREDIT ACCOUNTS-

It is always healthy if you have a mixture of Loans like Credit Card, Personal loans, Home loans, etc. Now, see the table

NOW, ADD All those Five Things and final outcome would be your expected Credit Score,offcourse it would be not accurate but it's 90-95% Accurate.This Formula has been applied to 20 Different People and the Results were +/-20 Points are here and there.

Try and comment.

 

[shrewdoc]

zero debt is the best debt

I would love to argue with this perspective, although not in mood right now.

Anyways, to each his own. 😄

 

[Quantum]

I would love to argue with this perspective, although not in mood right now.

Anyways, to each his own. 😄

My comment was only in the context of CIBIL score calculation and for CICs, and NOT as a general financial guideline.
Hope that makes it clear?

 

[aayusharyan]

How CIBIL Score is Calculated in India ?
Check CIBIL Score formula & learn how does it calculated.

Now, This is the Ratio, that our Credit Score comes from and has an Impact on Gaining and Losing Credit Score in Points.

1. PAYMENT HISTORY-

This is the Most Important Factor, Now see the Parameter/Table

Now, You Can ADD THE POINTS - Eg-

1. If you have just recently paid like 0-4 months then add 15-25 Points.

2. If there is no delay in payment then add 85-95 Points

3. No Bankruptcy - Add 75-85 Points

Now, See even if you don't pay the bank/NBFC then also you will get a score but see the points gap,



2. DEBT BURDEN/CREDIT UTILIZATION-

Now, See if you don't have any burden then also point score will be less or even if you have heavy debt burden then marks will be deducted or less score. So, I will add 20-29% which is 145-155 points along with previous points.

3. LENGTH OF CREDIT HISTORY-

The most important thing look at the points in increasing order along with years,so better to keep our old products active.

Add No.of Months like which is the longest credit report product for you mine is in 12-23 months, so I will add 105-115 points with the previous one. (It can be seen in the cibil report or directly in OneScore App)

4.RECENT SEARCHES FOR CREDIT/CREDIT ENQUIRIES-

Now, See How Many Enquiries have you made in CIBIL in the Last 6 Months that also impact, Add this previous one.

5. TYPES OF CREDIT/MIXTURE OF CREDIT ACCOUNTS-

It is always healthy if you have a mixture of Loans like Credit Card, Personal loans, Home loans, etc. Now, see the table

NOW, ADD All those Five Things and final outcome would be your expected Credit Score,offcourse it would be not accurate but it's 90-95% Accurate.This Formula has been applied to 20 Different People and the Results were +/-20 Points are here and there.

Try and comment.

Wow, according to middle values of this chart. My CIBIL should be 785. Actual is 788. Nice information. 😍

 

[tn_72]

In the Unites states and Canada, there are two more factors in addition to those listed in the main post that could influence credit score. One is how long have you stayed in particular address and other the percentage of defaulters in your neighborhood (pincode/zipcode). The above two are proxy indicators of financial stability. If you are constantly changing address, it would mean that you can't afford to pay the rent and hence constantly moving out with unpaid dues, which indicates financial instability. Conversely, if you have not changed address for a long period of time, it would indicate that you own the house you stay at and hence you are financially stable. Second if you are in a poor neighborhood, the probability that you default is higher. Transunion which is one of the credit bureaus in US/Canada, operates as Transunion CIBIL in India. So chances are they could use the aforementioned factors for CIBIL score calculation, but the weightage might be too less when compared to US/Canada.

 

[infinia_finally]

In my CIBIL report, I don't understand these entries.
I didn't apply any HDFC CC in 6/23
Do they do inquiry for generating upgrade offer that wasn't requested by customer?

How long will effects of inquiry affect score? 6 months Max?

Upgrade to Infinia in December doesn't show any hit so far. Will it show later?

Also, Sbm was savings account for vested. Why does inquiry show cc?

 

[D₹V]

In my CIBIL report, I don't understand these entries.
I didn't apply any HDFC CC in 6/23
Do they do inquiry for generating upgrade offer that wasn't requested by customer?

How long will effects of inquiry affect score? 6 months Max?

Upgrade to Infinia in December doesn't show any hit so far. Will it show later?

Also, Sbm was savings account for vested. Why does inquiry show cc?

E-mail HDFC with latest report, they'll remove.

Same for SBM.

 

[infinia_finally]

Based on formula (and assuming effects of June 23 inquiry are still there), score range is 775-850. Avg is 812
But my score is 794.



I have a question, Due to annual insurance premiums, my credit utility is going to reach 46% in Feb statement.

Will that drop score by 100 points immediately and recover in next month,?
How frequently is CIBIL refreshed? Or depending on how refresh date aligns with cc bill date, score may not drop, or recover after few months?

Is it advised to pay bill in advance in Feb?

Usually usage is ~5%

 

[SSV]

I have a question, Due to annual insurance premiums, my credit utility is going to reach 46% in Feb statement.

Will that drop score by 100 points immediately and recover in next month,?

Will definitely take a hit, don’t think it will be 100.
It will recover immediately after you pay in full and when it was reported of the same.
However you will not be effected if you pay the entire amount before bill generation

How frequently is CIBIL refreshed? Or depending on how refresh date aligns with cc bill date

For every event that influences the score . There is no set period. It’s refreshed on demand when a financial institution asks for it. Means the latest score as per data reported will be served to the financial institution. It had nothing to with align to your reporting period

Is it advised to pay bill in advance in Feb?

If you don’t want your score to be impacted negatively, it is highly advisable to clear your outstanding bill before bill generation/ reporting date whichever is earlier

Usually usage is ~5%

Make it to 0 or -ve on each of the accounts and then see your score jump to 804, other things being equal..
Enjoy weekend

 

[D₹V]

Usually usage is ~5%

Usage is counted on card to card basis, not overall

Is it advised to pay bill in advance in Feb?

Yes

Will that drop score by 100 points immediately and recover in next month,?

No, that happens in late payments.

You score might drop upto 30 points

How frequently is CIBIL refreshed? Or depending on how refresh date aligns with cc bill date, score may not drop, or recover after few months?

Whenever something changes, doesn't care about when you refresh.

Clear all dues before month end / report date.

Make outstanding zero or negative to see huge impact in CIBIL score.

HDFC/SBI/KOTAK/etc reports in month end.

 

[drsel]

Usage is counted on card to card basis, not overall

Yes

No, that happens in late payments.

You score might drop upto 30 points

Whenever something changes, doesn't care about when you refresh.

Clear all dues before month end / report date.

Make outstanding zero or negative to see huge impact in CIBIL score.

HDFC/SBI/KOTAK/etc reports in month end.

Is negative balance better than zero for CIBIL score?
How much negative 1, 100, 1000, 5000, 10000?

 

[SSV]

Is negative balance better than zero for CIBIL score?
How much negative 1, 100, 1000, 5000?

No difference between 0 and -ve , but it has to be for each and every account..
-ve of 0.001 is also fine.. if you prefer -ve

 

[D₹V]

Is negative balance better than zero for CIBIL score?
How much negative 1, 100, 1000, 5000?

Yes, zero or negative any will work.

It boosts CIBIL score real time (when reported).

 

[msk1437]

Mean is 770 and I got 773.. close

 

[praful47]

How CIBIL Score is Calculated in India ?
Check CIBIL Score formula & learn how does it calculated.

Now, This is the Ratio, that our Credit Score comes from and has an Impact on Gaining and Losing Credit Score in Points.

1. PAYMENT HISTORY-

This is the Most Important Factor, Now see the Parameter/Table

Now, You Can ADD THE POINTS - Eg-

1. If you have just recently paid like 0-4 months then add 15-25 Points.

2. If there is no delay in payment then add 85-95 Points

3. No Bankruptcy - Add 75-85 Points

Now, See even if you don't pay the bank/NBFC then also you will get a score but see the points gap,



2. DEBT BURDEN/CREDIT UTILIZATION-

Now, See if you don't have any burden then also point score will be less or even if you have heavy debt burden then marks will be deducted or less score. So, I will add 20-29% which is 145-155 points along with previous points.

3. LENGTH OF CREDIT HISTORY-

The most important thing look at the points in increasing order along with years,so better to keep our old products active.

Add No.of Months like which is the longest credit report product for you mine is in 12-23 months, so I will add 105-115 points with the previous one. (It can be seen in the cibil report or directly in OneScore App)

4.RECENT SEARCHES FOR CREDIT/CREDIT ENQUIRIES-

Now, See How Many Enquiries have you made in CIBIL in the Last 6 Months that also impact, Add this previous one.

5. TYPES OF CREDIT/MIXTURE OF CREDIT ACCOUNTS-

It is always healthy if you have a mixture of Loans like Credit Card, Personal loans, Home loans, etc. Now, see the table

NOW, ADD All those Five Things and final outcome would be your expected Credit Score,offcourse it would be not accurate but it's 90-95% Accurate.This Formula has been applied to 20 Different People and the Results were +/-20 Points are here and there.

Try and comment.

Noone can predict the actual or nearby cibil . No matter how much theories you put in .
Cibil varies case to case with very minute details

 

[anisharya16]

i got 845, but mine is 769 (14 points decreased recently because my credit utilization increased from 4% to 11%), even if I add this it becomes 783(769+14).

 

[taskmaster]

When do these cibil enquiries get on our report? Is it immediate?

 

[SSV]

When do these cibil enquiries get on our report? Is it immediate?

Periodically , and it depends on bank to bank

 

[cardy]

How to convince bank about this

whenever we request to remove them (wrong type or not done by me), they just say "sir, enquiries se kuch farak nahi padta" (enquires doesn't affect score)

That's why there is rbi ombudsman.
Some have gained 10,000/- plus compensation on duplicate cibil enquiry

 

[Harry1]

Finally reached the magic figure of 800 after staying around 780 for almost 3 years. No loans except some closed pay later accounts.

3 events in last month -

Current cibil utilisation says Zero for every card. It's taking March data and I cleared everything in March.

Last 6 months enquiry is 2.

Overall credit age 5+. But that card is closed actually. So, among active cards, it is lesser.

Not sure what triggered it. As per formula, zero utilisation is bad, but here it doesn't seem to be the case. Enquiries do seem to matter, as it is after long time that I have only 2 enquiries in 6 months.

Let's see if it stays or I come back to 780 next month, as utilisation is back to normal next month and hopefully no enquiry.

 

[anisharya16]

Finally reached the magic figure of 800 after staying around 780 for almost 3 years. No loans except some closed pay later accounts.

3 events in last month -

Current cibil utilisation says Zero for every card. It's taking March data and I cleared everything in March.

Last 6 months enquiry is 2.

Overall credit age 5+. But that card is closed actually. So, among active cards, it is lesser.

Not sure what triggered it. As per formula, zero utilisation is bad, but here it doesn't seem to be the case. Enquiries do seem to matter, as it is after long time that I have only 2 enquiries in 6 months.

Let's see if it stays or I come back to 780 next month, as utilisation is back to normal next month and hopefully no enquiry.

Yes I also experience the same, one of my card utilisation was 0% but then I used it for some transaction and it increased to 4% and then credit score decreased.