CIBIL Credit Score Zero Or Negative? What Does It Mean?

Find out what a zero or negative CBIL credit score means and what you can do about it. Learn helpful tips on how to improve your credit score and better manage your finances.

5 Sep,2023 13:10 IST 2072
CIBIL Credit Score Zero Or Negative? What Does It Mean?

Credit is essential for individuals and businesses, with credit scores determining credit availability and repayment capacity. TransUnion CIBIL, a trusted credit bureau, influences loan decisions. An excellent CIBIL score leads to quick approval and favorable loan terms. But what exactly is a perfect credit score? What is the possibility of a zero or negative credit score? Read further to decipher the concepts.

What Is A CIBIL Score?

Your CIBIL Score, a numeric figure between 300-900, reflects your loan and credit repayment capability. A higher CIBIL score will improve your loan or credit card approval chances, as lenders prioritize it when reviewing your application. TransUnion CIBIL, the credit bureau responsible for assigning your score, calculates your credit repayment behavior and borrowing patterns.

How Is CIBIL Score calculated?

Consumer CIBIL Bureau adopts the FICO scoring model to calculate CIBIL scores , considering various credit behavior aspects with assigned weightage. Factors impacting the score and their weightage are as follows:

Payment history: 30%
Credit exposure (outstanding dues): 25%
Credit type and duration: 25%
Other factors (active loans, credit cards, and inquiries): 20%

Creditworthiness and CIBIL scores rely on these factors, with credit utilization ratio (CUR) also playing a vital role.

Different CIBIL Score Ranges:

Your CIBIL score significantly influences loan and credit card approvals. Scores between 750 - 900 suggest an excellent credit history for easy approval. Scores of 700 - 750 indicate timely repayments but may require additional checks. A range of 550 - 700 signals irregular repayments, leading to higher interest rates or unfavorable terms. Scores between 300 - 550 indicate defaults and undisciplined credit behavior, challenging loan or credit card approvals.

Apart from these, the credit score can also be zero or minus 1.

When Is The CIBIL Score Zero?

Individuals with less than six months of credit account history will have a zero CIBIL score, as the agency needs more data to assign a score. This score is also called NA or 'Not Applicable'. While a zero score isn't inherently negative, it may limit access to the best loan and credit card offers with lower interest rates. Lenders need a credit history to assess financial credibility. However, individuals with a zero score can still apply for credit cards and loans from banks or NBFCs, but banks may exercise more caution in lending.

When Is The CIBIL Score Minus One?

A CIBIL score of -1 indicates no retrievable data on borrowing behaviour. It is also indicated as NH or 'No History'. This can happen due to no credit history, no loan or credit card applications in the past two years, or no direct credit exposure. While not negative, obtaining loans or credit cards may be challenging, with some lenders rejecting applications based on the score. Establishing and maintaining a good credit history is crucial to avoid a CIBIL-1 score and improve borrowing prospects.

Verification In Case Of Zero Or -1 CIBIL Score:

So if we can still apply for loans in case of a low CIBIL score, how do banks verify profiles? Banks use surrogate and ad-hoc parameters to assess repayment capability in the absence of a credit score. Factors such as
  • savings account balance,
  • zero cheque bounces, and
  • disciplined financial behavior
influence the lender's evaluation. Starting with secured or small loans and considering the credit histories of individuals with similar demographics also play a role. Your employment status and type of residence are also considered, with gradual credit limit increments based on the borrower's repayment track record. These considerations help first-time borrowers establish their creditworthiness and access loans.

How To Get A Loan With A Zero Or Minus Credit Score?

You can explore alternative credit histories, such as rent and utility bills to secure a business loan despite bad credit. Emphasizing factors like employment history and consistent bank account balances can strengthen your case.

Opting for secured loans like a secured credit card, gold loan, or joint loan and repaying them on time can help build credit scores. Collateral-based loans against assets like gold, real estate, or vehicles offer favorable interest rates and larger loan amounts.

Alternatively, finding a co-signer with a good credit history may boost approval chances, but defaulting on payments can harm both credit scores. Another option involves becoming an authorized user on someone else's credit card, relying on their credit history to access personal loans. However, maintaining timely payments is crucial to avoid negatively impacting the co-signer's credit scores.


Despite the low credit score, you can build it by regularly reviewing your CIBIL credit report to identify defaults or late payments affecting your credit score. Additionally, avoid applying for multiple loans or credit cards to prevent appearing credit hungry and maintain better financial management. Apply for a loan with IIFL Finance and repay debts promptly to build a positive CIBIL credit score. Begin your credit journey with IIFL Finance soon because it is an important factor to quickly avail of funds in the future.

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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