I am new to the concept of credit card, and want to know what is the credit score and why is it useful?
The CIBIL score is a type of credit score provided by the credit information company CIBIL (Credit Information Bureau India Limited). It calculates your score using its own proprietary algorithm based on your credit history. Among all credit scores in India, the CIBIL score is the most commonly used and widely accepted by banks and financial institutions when assessing loan or credit card applications.
Are credit score and CIBIL score same?
No, a credit score is a 3 digit number that reflects your creditworthiness, and it’s calculated by credit information companies based on your loan and credit card repayment history. Each of these generates a credit score using its own algorithm, and all are considered valid. However, CIBIL score which is provided by the credit information company CIBIL (Credit Information Bureau India Limited). It is the most commonly used by Indian lenders, so people often use the term CIBIL score interchangeably with credit score.