CIBIL TransUnion Score 2.0
CIBIL score is a measure of your creditworthiness. It is an important tool that makes you eligible to borrow credit in the form of a loan or a credit card. A CIBIL score is calculated by the TransUnion CIBIL credit information company (CIC) also known as credit bureaus. In October 2012, TransUnion CIBIL launched a new version of the CIBIL score called "CIBIL TransUnion Score 2.0". The new CIBIL scoring model aims to predict the risk of lending credit in a more detailed way with the score customized for the changing Indian market.
The CIBIL Score 2.0 is designed after taking into consideration the current trends in the Indian market and changes in the consumer profiles as well as credit data. It helps lenders score the borrowers with greater accuracy and measure the risk in a more effective way. The newer version of CIBIL has been introduced to cater to the current shift in borrowing trend. There has been a change in the ratio of secured and unsecured loans as borrowers are slowly moving from credit cards and personal loans to home and auto loans.
What is New in CIBIL TransUnion Score 2.0?
CIBIL Score 2.0 introduces a new risk index for first-time borrowers. In the older version of CIBIL, the CIBIL score for all first-time borrowers with less than six months credit history was zero. However, in the case of CIBIL Score 2.0, it rates borrowers with less than six months of credit history in a different range. The new scoring model of CIBIL allows lenders like banks, financial institutions, and non-banking finance companies (NBFC) to offer loans to individuals with a better understanding of their ability to repay the borrowed amount. Also, CIBIL Score 2.0 encourages an inclusive financing approach by offering credit to more individuals who have no credit history.
Features of CIBIL Score 2.0
As per the risk index, borrowers with less than six months of credit history will be rated on a scale of 1 to 5. This helps lenders classify first-time borrowers into high, medium, and low risk. A score of 1 suggests the borrower is at the highest risk of turning a defaulter and a score of 5 suggests he/she is at the lowest risk.
Risk Index | Meaning |
-1 or NA/NH |
|
1 | Highest risk of turning a defaulter |
2 | High risk of turning a defaulter |
3 | Medium risk of turning a defaulter |
4 | Low risk of turning a defaulter |
5 | Lowest risk of turning a defaulter |
300-900 |
|
Advantages of CIBIL TransUnion Score 2.0 for Lenders
With CIBIL Score 2.0, lenders get an opportunity to improve the quality of their lending decisions throughout the customer lifecycle. It acts as an important tool to approve credit and define credit terms for first-time borrowers. Moreover, the new scoring of the CIBIL model improves cross risk management for lenders and helps them take sounder decisions.
Advantages of CIBIL TransUnion Score 2.0 for Borrowers
It must be noted that if you check your score with CIBIL Score 2.0, it may be lower than the older version. However, you should not worry, as the scores have been adjusted according to the new scoring method. Also, the difference in the new and old version of credit score will not impact the lender's credit decisions at the time of the loan approval process. This is mainly because lenders may have a different loan eligibility criterion depending on the version they are using. You should check your CIBIL score from time-to-time to get an idea of your credit health. It is advised to check your CIBIL score especially when you planning to apply for a loan.
The CIBIL TransUnion Score 2.0 is accessible across channels web and online. It's available with CIBIL Credit Information Reports, CIBIL Portfolio Review Reports, or CIBIL TransUnion Bureau Credit Characteristics.
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FAQs on CIBIL TransUnion Score 2.0
- What is a good CIBIL TransUnion score 2.0?
A good CIBIL TransUnion score 2.0 should be maintained by keeping debt to income ration under 30% of the available limit and clearing payment dues on time. Maintaining the gap between balance on card and loans and avoiding multiple e credits will also improve the CIBIL TransUnion 2.0 score.
- Is CIBIL a subsidiary of TransUnion?
Yes, CIBIL is a subsidiary of TransUnion as it acquired around 92.1% stake of CIBIL in 2017.
- How should I interpret my TransUnion CIBIL report?
Get a copy of the TransUnion CIBIL report and navigate to any of the online resources to interpret your score report. Otherwise, it could be overwhelming to interpret the entire report on your own if you are a beginner.
- Which of the CIBIL scores is correct?
Whether the CIBIL score is right or wrong depends upon the financial situation of the individual. In most cases, TransUnion scores are accurate provided there is no technical glitch but may differ from other scores.
- How Can You Access the CIBIL TransUnion Score 2.0?
CIBIL TransUnion Score 2.0 can be accessed through various channels such as online, FTP, and website.
- How does TransUnion calculate credit score?
The scores by TransUnion are calculated by using the information updated on the credit report of the individual. The score is based upon the VantageScore® 3.0 model and ranges between 300 to 850.
- What is TransUnion score used for?
Lender uses TransUnion score to evaluate the credit application and helps the lenders to determine the lending risk. TransUnion scores make it easier, faster, and fairer to decide the loan approval possibility.
CIBIL Score Requirements for Loans
Disclaimer
Credit Card:
Credit Score:
Personal Loan:
Home Loan:
Fixed Deposit:
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