CIBIL Introduces New Version of its Credit Score

Credit Information Bureau (India) Limited (CIBIL) has launched an upgraded version of its credit score named ‘CIBIL TransUnion Score 2.0’. The new version of credit score is introduced for new borrowers. Unlike its older version, this upgraded credit score aims to predict the repayment capability of the new borrowers who has credit history of less than 6 months.

Earlier, the consumers who owns less than six months credit history, used to have a score value of ‘0’ in their credit report. Now, it will be graded on a risk index ranging from 1 to 5, where 1 would mean the score of a person with highest risk and 5 would mean the score of a defaulter with lowest risk. The higher the score , the lower the risk profile of the individual.

Generally, CIBIL credit score indicates the probability of the borrower defaulting on repayment of credit based on the factors like credit history or repayment track record, number and amount of loans availed. It helps lenders to make informed decisions on approving or rejecting loan applications.

The scoring model for those with a credit history of more than six months remains unchanged which provides a value ranging from 300 to 900 where 300 indicates the highest risk and 900 indicates the lowest risk of default.