What is a credit score, and how is it calculated?

A credit score is a number from 300 to 900 that a credit bureau works out from your credit report, the record lenders send it of your loans and card payments. A lender is a bank or other finance company that gives you a loan or a credit card. Each lender decides what score it wants.

What is a credit score?

A credit score is a three-digit number, from 300 to 900, that a credit bureau works out from your credit history. A credit bureau, which RBI calls a credit information company, is a company that collects records of people's borrowing and turns them into reports and scores. Your credit report is the record itself: every loan and card, and how you have paid.

Banks do not set your score. They supply the data: RBI's rules say a lender must send its borrowers' credit data, including historical data, to all the registered bureaus.

Who calculates your credit score in India?

India has four credit bureaus registered with RBI: TransUnion CIBIL, Experian, Equifax and CRIF High Mark. Banks report your loans and cards to all four, so each holds its own report and score on you.

"CIBIL score" is the score from TransUnion CIBIL. So a CIBIL score is a credit score, but it is one bureau's version.

The four scores can differ. Equifax says "it is likely that an individual will have different scores in each Bureau" because "each Bureau uses their proprietary scoring model".

What is the credit score range, and what is a good score?

Every bureau scores between 300 and 900, because RBI requires that scale. Higher is better, and 900 is the top.

RBI sets no pass mark in the directions it issues to banks and bureaus. Each lender sets its own, as our guide to home loan eligibility shows for home loans. Equifax adds that lenders typically have different score cut-offs depending on which bureau supplies the score.

CIBIL says a score above 700 is generally considered good. That is CIBIL's statement, not a rule. CIBIL also says the decision to lend is solely the lender's: CIBIL does not decide whether a loan or card is sanctioned.

If you have never borrowed, you may have no score at all. CIBIL calls this a "No Hit": there is not enough credit activity to generate a score and report. RBI's direction to banks says first-time borrowers' loan applications should not be rejected just because they have no credit history. Building a first record is covered in our low CIBIL score guide.

How is a credit score calculated?

The bureau works the score out from the accounts and enquiries in your credit report. The bureaus do not publish a formula or any weights. The bureaus name these as counting:

• paying on time
• how much of your card limits you use
• the mix of loans
• how often you apply for new credit
• how long you have had credit

CIBIL says its score is "derived using details found in the 'Accounts' and 'Enquiries' sections" of the report. Its advice names paying dues on time, keeping balances low and applying for new credit in moderation. It also names a healthy mix of secured loans, such as a home loan, and unsecured ones, such as a personal loan or credit card.

Credit utilisation is how much of your credit card limit you are using. A credit card limit is the most the issuer lets you spend on the card. An enquiry is the note on your report each time a lender checks it because you applied for credit.

The utilisation arithmetic is in why a CIBIL score is low.

What is in your credit report, and how do you read it?

A credit report lists your personal, contact and employment details. It also lists every loan and card where you are the borrower, a co-borrower or a guarantor, and the enquiries lenders have made.

Here is how to read it:

• Personal and contact details. An entry that is not yours may be an ownership error.
• Employment section. CIBIL says it can show monthly or annual income as reported by its members, meaning lenders.
• Accounts. Each loan or card shows its status and a month-by-month payment record. Days past due, or DPD, is how many days a payment is late.
• Enquiries. The lenders that pulled your report.

RBI's rules say the report must give details of loans where you are the borrower, a co-borrower or a guarantor. A co-borrower is a second person who takes the loan with you and shares the repayment. A guarantor is a person who agrees to repay if the borrower does not. Closed accounts are shown after live ones.

Your savings, investments and fixed deposits (FDs), which are money placed with a bank or company for a set period, are not in the report. CIBIL says so plainly.

RBI says a lender uses "settled" only where the borrower could not repay on the original terms and the lender waived some principal or interest, or both. A closed account is one that is no longer live.

How can you check your credit score and report for free?

Each of the four bureaus must give you one free full credit report, with your score, every calendar year. It is the same detailed report lenders see. RBI requires the link on the bureau's home page. Four bureaus mean up to four free reports a year.

Checking your own report is not a loan application. A lender's check on an application is a "hard" enquiry, and Experian says a hard enquiry might temporarily lower your score. Experian also advises checking your own score before you apply for a loan.

There is no rule on how often to check. You can spread the four free reports across the year. Reading one is how you spot an account or enquiry you do not recognise, or a wrong late mark, before a lender does.

When does your report update?

Since 1 July 2026, banks send updates to the bureaus four times a month, with data as on the 9th, 16th, 23rd and the last day. The full month-end file is due by the 5th of the next month. The other updates are due within four calendar days.

A payment you make should therefore normally reach your report within about two weeks. Meera repays on 24 October. The 31 October reference date picks it up, the file is due by 5 November, and the bureau must load it within three calendar days. That is about 8 November.

How do you fix a mistake in your credit report?

Raise it with the bureau online or with your lender. The lender has 21 days to send corrected data, the whole complaint must close within 30 days, and for each day after that you are owed ₹100.

The steps:

1. Find the error in your free report.
2. Raise it with the bureau, which CIBIL allows online or by letter. If more than one lender is involved, register the complaint with the bureau.
3. Keep the reference number and the date you filed.
4. If the correction is refused, you must be told why.
5. If the bureau or lender wrongly refuses compensation, complain to the RBI Ombudsman, RBI's free complaint scheme that covers banks, most non-bank lenders registered with RBI and credit bureaus, at cms.rbi.org.in. You can go there after 30 days without a reply from the bureau or lender, or after an unsatisfactory reply, within 90 days of that.

Meera files a complaint on 1 November 2026, so it must be resolved by 1 December. If the corrected report is sent on 6 December, she is owed five days at ₹100, which is ₹500. It is paid into her bank account within five working days.

Data is corrected at the source, which is the lender. After a correction, the bureau must give a free copy of the corrected report to whoever received your report in the previous six months.

Disagreeing with how the score is calculated is not covered by this compensation. CIBIL says a dispute may take about 30 days, subject to the time the lender takes to respond.

What if someone has taken a loan in your name?

An account or enquiry that does not belong to you is an "ownership" error, one of the inaccuracies CIBIL lists. Dispute it as above. The bureau must send you an SMS or email whenever a lender or other member pulls your report, where it has your number or email. An enquiry you did not make is an early warning that someone may be applying in your name.

If you lose money to an online fraud, call 1930, the national cyber-fraud helpline run under the Home Ministry's I4C, or file a complaint at cybercrime.gov.in, and tell your bank at the same time. See also protecting yourself from online and banking fraud.

Credit score myths: what is true and what is not?

Most myths mix up your own check with a lender's enquiry, or treat the report as a measure of wealth.

• Myth: checking your own score lowers it. Your own check is not a loan application. A lender's check on an application is a hard enquiry that can lower the score for a while.
• Myth: a loan rejection goes on your report. RBI forbids bureaus to report loans declined earlier. The enquiry from the application does show.
• Myth: your salary decides your score. The factor lists the bureaus publish are about repayment, use of limits, the mix of loans and applications. Income can appear in the employment section as a lender reported it. Savings and fixed deposits do not appear at all.
• Myth: a debit card builds your score. A debit card spends your own money, not a loan, so it is not a credit account.
• Myth: a low score means automatic rejection. The decision to lend is the lender's, as CIBIL says. Our guide to getting a personal loan with a low CIBIL score covers that case.
• Myth: CIBIL keeps a defaulters list. CIBIL says it does not maintain one, and that there are no "good" and "bad" credit lists either. "Wilful defaulter" is a separate RBI label for a borrower who could pay but did not, or misused the money, with ₹25 lakh or more outstanding.
• Myth: closing or paying off a loan wipes it from your report. Closed accounts stay as history. Under RBI's 2006 regulations, bureaus and lenders keep credit records for at least seven years.
• Myth: standing guarantor does not affect you. The loan shows on your report, and CIBIL says that if the main borrower misses payments, your score is affected too.
• Myth: only the number of cards you hold matters. CIBIL's advice is about keeping balances low against your limits and applying for new credit in moderation. It also says too many unsecured loans, which include cards, may be viewed negatively.
• Myth: a loan against your FD or mutual funds does not count. It is reported like any other loan, as loans against fixed deposits show.

What keeps a credit score healthy?

CIBIL's advice comes down to three habits. Pay every EMI and card bill on time. Keep card balances low against your limits. Apply for new credit only when you need it. An EMI, or equated monthly instalment, is the fixed amount paid each month that covers interest and part of the loan.

For repairing a score, building a first record and how long it takes, read why your CIBIL score is low and how to improve it.