Why does India Need Free CIBIL Scores?

17-Sep-2016 written by : FSI-Team

Remember the revered year 2002? It was then that incoming calls to mobile phones were made free revolutionising the Indian telecom industry. Making incoming calls free was like a drop in the water as its ripple effects brought a boom in the segment. Soon, every person, no matter what economic strata, was carrying a cell phone. The time has come to make scores available for free and revolutionize the credit world.

CIBIL's website claims that about 80% of loans that are approved are for those with a CIBIL score of 750 and more. It is true. Your credit score is the most important factor in the loan evaluation process. It is one of the preliminary checks that a lender undertakes. If your score is below par, be assured your application will be processed no further and be rejected at that stage itself. That great is the importance of your score.

CIBIL TransUnion Score

The CIBIL TransUnion score is a numerical summary of your historical credit pursuits and how well they were serviced. It is calculated using a proprietary formula, to which we do not have access. What we know are the factors that affect the CIBIL score directly and indirectly.

There is quite a hullabaloo about what the CIBIL score really encompasses. But once you delve into unravelling the mystery of your score, you realise it is not that puzzling at all. We bring to you a quick insight on what goes into the computation of your score.

  1. Timely Repayments make up for 35% of your score
  2. Current exposure to credit – 30%
  3. Credit history – 15%
  4. Secured loans versus unsecured loans – 15%
  5. Hard credit enquiries – 5%

How Free Scores Help

Let's take a leaf out of any economics book. Somehow, "consumers" are instantly attracted to a product when it is given for free. It is no secret that in spite of CIBIL being around for more than a decade and a half, a large chunk of the Indian population is unenlightened about what a credit score is. There isn’t an ounce of doubt that when free scores are made available for free, it will tempt more people to enquire about it and become enlightened. Enlightenment will bring empowerment of the masses.

Of the four bureaus that have been licensed by RBI to operate in India, CIBIL is the oldest. CIBIL boasts of having the most historical data and also of the largest database in the country today. Since free CIBIL score would benefit a wider section of the crowd, thus it is imperative for them to be made free.

Unleash the Power of your Credit Score

What would you say if we told you that most Indians have a credit score that can help them get loans at a lower rate but they don’t know about them and therefore they are paying a higher rate? Gasp! Here are some compelling reasons for CIBIL scores to be made free:

  1. CIBIL score is the most important factor in loan evaluation process. It helps a lender gauge a prospective borrower's creditworthiness.
  2. It is important to keep a track of your report & score to thwart any incidents of identity theft. Such cases are true and widely reported. If you have easy access to your report, you are more likely to spot frauds, raise an alarm in time and contain the damage.
  3. In the western nations, one report per bureau is given for free once a year. It helps in staying up-to-date with own records.
  4. If your report houses errors, they can be corrected to reflect accuracy of information. This could also help to improve your score.
  5. A higher score is greatly beneficial to not just the lender but also the borrower. A healthy score assists a borrower in negotiating a lower rate of interest.
  6. Not just lenders but employers, insurance companies, telecos, landlords etc. are increasingly showing interest in viewing credit reports before any business is done with an individual. When your score is sought by a wider audience it is becomes all the more your responsibility to upkeep your report.
  7. It will bring greater transparency in the system as both the borrower and the lender will be equally informed. Neither the borrower nor the lender will feel cheated when entering in an agreement.
  8. In the digital age, providing CIBIL rating online for free will help the bureau save on printing and riding costs.
  9. Enquiring into your own report does not affect your score. It is considered a soft enquiry. Besides that to most people it sounds absurd to pay for viewing their own scores.


Like making incoming calls free unleashed the power of telecommunications, similarly making CIBIL scores free will empower the common man and make borrowing & lending more efficient. Giving access to credit scores for free encourages the general public to make an effort to understand. In the light of the above, CIBIL has introduced a bi-monthly and quarterly subscription offers where you can access your report at a discounted rate from CIBIL directly.

Till the time RBI wakes up to it, websites like have decided to shoulder the responsibility to provide authentic credit scores for free. Access to free scores simplifies managing & planning personal finances.



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