CIBIL is the term used in the context of loans which are granted by banks to borrowers. Full form of CIBIL is Credit Information Bureau India Limited; it is used by the banks to check the history of the borrower and whether or not the borrower will be able to repay the loan or not on the basis of past credit history. CIBIL score range is 300 to 900, within this range there is no ideal CIBIL score but the more the score the better are the prospects of individual getting the loan approval from the bank or financial institution.
For example, if one individual has CIBIL score of 800 and other has a score of 850 and the bank has to choose between the two then it will choose the borrower who is having CIBIL score of 850. CIBIL takes into account many variables before arriving at a definite score so factors like timely repayment of loan installment, less use of credit card limit and so on are good for credit score whereas factors like defaulting on loan installment, credit card payment delay, multiple loan accounts and so on will lead to lower credit score.
As one can see from the above that CIBIL score is of paramount importance when one is thinking about taking a loan from banks or financial institutions because a bad CIBIL score will not be viewed as the good thing by the lender and chances of getting loan will be next to nil in case of very bad CIBIL score. Hence one should keep factors which improve CIBIL score in mind and try to avoid the negative factors so that the loan does not get rejected due to bad CIBIL score.