How Your Credit Score Really Works in India

Your credit score is a number between 300 and 900 that lenders use as a quick summary of how reliably you have handled borrowed money in the past. In India it is calculated by four RBI-licensed credit bureaus — TransUnion CIBIL, Experian, Equifax and CRIF High Mark — each using its own model, which is why your score can differ slightly from one report to another.

What actually moves the number

The bureaus do not publish exact formulas, but the broad weightings are well understood and consistent across models.

• Repayment history — whether you pay EMIs and card bills on time. This is the single largest factor.
• Credit utilisation — how much of your available card limit you use each month. Staying under 30% helps.
• Age and mix of credit — a longer history with a healthy mix of secured and unsecured loans reads as stability.
• Recent enquiries — several loan applications in a short window looks like distress and pulls the score down.

Why the same income gets different offers

Two applicants earning the same salary can see very different interest rates because the score reflects behaviour, not earnings. Someone who has run a credit card responsibly for five years presents far less risk than someone with no credit history at all, even if both earn identically.

Checking your own score is a "soft enquiry" and never damages it. You are entitled to one free full report from each bureau every year — reviewing it for errors is the cheapest way to protect your borrowing power.