All About CIBIL 2.0 – What’s New

Last Updated : Feb. 6, 2025, 6:16 p.m.

All of us know the importance of the CIBIL score and how important it is. It is a measure of your creditworthiness. Before approving your loan or credit card application, lenders look into your CIBIL score. The CIBIL score is issued by the credit bureau TransUnion CIBIL or TransUnion Credit Information Bureau India Limited. In October 2012, CIBIL came up with a new version of the CIBIL score called “CIBIL TransUnion Score 2.0”. This scoring model helps the lender analyze the risk of lending credit in a more detailed manner. It is customized to suit the needs of the changing trends in the Indian market, changes in profiles of consumers, and credit data. The new CIBIL score is more accurate and is aligned to the shift in borrowing where the focus is now moving from credit cards and personal loans to home and auto loans.

Features and Benefits of TransUnion CIBIL Score 2.0

Here are the features and benefits of the TransUnion CIBIL Score 2.0:

• Customers with more than six months of credit history: Individuals with a credit history of more than six months have a credit rating between 300 to 900. Under the old model, the ideal CIBIL score was 651 to 800 whereas in the new model, it is in the range of 662 to 697. The closer the CIBIL score is to 900, the less riskier it is for lending institutions.
  
• Customers with less than six months of credit history: The new CIBIL scoring model makes use of a risk assessment index chart to evaluate the risk associated with borrowers about whom the credit history information is limited. The risk assessment index varies on a scale of 1 to 5, and it categorizes borrowers into high risk, medium risk, and low risk. A higher CIBIL TransUnion score means a lower risk for lenders. For instance, a score of 1 means the highest risk while 5 means the lowest risk.
  
• NA / NH or -1: In the TransUnion CIBIL 2.0 scoring model, NA/NH is given to individuals with no credit history. Also, if the credit history of an individual is not reported to CIBIL for more than 24 months, he or she can be assigned NA/NH or -1. Gradually, most lending institutions are adopting the new version to keep up with the changing trends in borrowing.
  
• Enhanced credit decision making: The TransUnion CIBIL 2.0 scoring model can be used by all CIBIL member financial institutions. It enables them to make better decisions regarding lending to borrowers and categorizes them into multiple categories based on their repayment behavior.
  
• Simplified Lending Process: The new scoring system of CIBIL has enabled lenders to evaluate the risk in lending to borrowers more accurately. This score reflects each and every aspect of the borrowers’ credit related activities.

What’s new in the CIBIL 2.0?

Earlier users who had negligible or no credit activity in the last 24 months were rated as NA or NH signifying the lack of enough credit activity. To simplify things Transunion CIBIL has come up with CIBIL 2.0. Now, customers who have less than 6 months of credit history will be rated on a scale of 1-5 with 1 signifying “high risk” and 5 signifying “low risk”.

If you are in the habit of seeing a higher CIBIL score, there’s an update –

• The credit score in CIBIL 2.0 will be lower than your CIBIL score
• You will also get the Risk Index in your updated report. The RI ranges from 1 to 5 with means the following things –

Risk Index for TransUnion CIBIL Score 2.0

Here is the risk index showing the level of risk for a borrower

Impact of TransUnion CIBIL Score 2.0 on Lenders

With this new scoring system, financial institutions can make informed decisions. It is a helpful model for deciding lending and loan terms especially for first time borrowers. Also, the new scoring system enables lenders to handle risks better and make easier decisions than before.

Can Individuals Assigned NA or NH Status Get a Loan or Credit Card?

Yes, it’s possible. Maybe, it would be a secured loan offer based on securities such as fixed deposit, national savings certificate (NSC), etc. The quantum of finance would depend on the value of the security submitted. You can get a loan of up to 80%-90% of the value of the security. Most likely, the rate of interest can be lower compared to unsecured loans.

Credit cards can be offered to those having salary accounts with the lender, with the credit limit to be decided on the basis of the remuneration an individual earns. By virtue of these offers, individuals under NA or NH category can build credit history over time.

What Credit Hygiene Should Borrowers with 1-5 Index Maintain?

People falling in this index, as said above, have a credit history of less than 6 months. Within the period, those having displayed good credit behaviour by paying dues on time would be accorded an index of 5 or closer to it. A delay or default in such a period can perceive it to be too risky and thus result in lowering the index.

Those having an index of 4 or 5 must keep up the good work of paying dues on time. This would further brighten their future credit prospects. Individuals being accorded an index of 3 or less must get their repayment in order, if not the case. They must keep the spends under control to be able to make loan or credit card payment on or before the due date. A long patch of timely payment would help build a strong credit history.

The lower index could also be a result of debt servicing track being very short, say a month or two. In such a case, one need not worry. Instead, they must ensure a timely payment of the debt and create the possibility for a continuous lift in the index.

What Does 300-900 Credit Score Range Indicate?

Once the repayment track goes past 6 months and the credit history is being reported to CIBIL in the last 24 months, the score of 300-900 would be applicable in CIBIL 2.0. More the score, lesser will be the risk and vice-versa. The meaning of a good credit score could differ in CIBIL 2.0 compared to the earlier version. A credit score of 750 and above was considered good in the earlier version. Even on a credit score of 700-750, credit applications were getting accepted by the lender subject to applicants meeting the overall eligibility criteria.

However, with the credit score possibly getting lower with CIBIL 2.0, it remains interesting to see how banks and other financial institutions view the score generated through the latest version.