How can first-time borrowers build a CIBIL score from scratch?

I'm planning to take a personal loan to fund a certification course, but I've never taken any loans or used a credit card before. I'm not sure if I even have a CIBIL score. I want to understand what a CIBIL score is, how it's calculated, what factors influence it. For someone like me who's just starting out and has no credit history, never taken loan, how can I work towards building a CIBIL score? I want to make sure I build it gradually and avoid any early missteps and understand it better.
If you're planning to take a personal loan for a certification course but have never used a credit card or taken a loan before, you're likely what lenders call 'new to credit.' This means you don't yet have a credit history, and probably don't have a CIBIL score either. That's completely normal for first-time borrowers — and a good reason to understand how credit scores work before taking the plunge.
A CIBIL score is a three-digit number ranging from 300 to 900 that shows how well you've handled borrowed money in the past. Lenders use this number to assess how likely you are to repay a loan. The higher your score, the better your chances of getting a loan at a good interest rate.
The score is calculated using several factors. These include whether you make repayments on time, how much of your available credit you use, how long you've been using credit, and how often you apply for loans or cards. These inputs are combined to reflect your creditworthiness as a borrower.
For someone like you who's just starting out, the most important thing is to begin creating a credit record. Once you've started using a credit product, it's crucial to pay every bill or EMI on time. Payment history is the biggest factor in your credit score. Even a single missed or late payment can harm your score significantly. To avoid this, set up automatic payments or calendar reminders so you never miss a due date.
Another key part of your score is something called credit utilisation—that is, how much of your total credit limit you actually use. It's ideal to keep this below 30%. So, if you have a credit card with a ₹ 10,000 limit, aim to spend no more than ₹ 3,000 during a billing cycle. Even if you pay it off in full, using most of your credit regularly may signal that you're too reliant on debt.
Avoid applying for multiple credit cards or loans in a short period. Too many inquiries can make it look like you're in urgent need of money, which can turn lenders cautious. Apply for new credit only when truly necessary and when you're confident about qualifying.
Lastly, keep an eye on your credit report. You're entitled to one free report per year from each credit bureau. Checking it regularly helps you ensure that all information is accurate and alerts you early if there's any error or fraud in your name.
Bhavesh Jain, MD and CEO, TransUnion CIBIL

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