CIBIL Score 1: Meaning, Impact & Next Steps

CIBIL score 1 means you don’t yet have a credit history. This can show up as ‘-1’ or ‘NH’ (no history) on your CIBIL report. It simply means you haven’t taken any loans or used a credit card yet. 

There’s nothing wrong with it. It just means you’re starting fresh. Many new borrowers have a CIBIL score of 1 or -1, as they begin their financial journey. To improve this score, you can start with secured credit cards, credit builder loans or small personal loans.

Read on to understand what a CIBIL 1 score means, how it’s different from a CIBIL 0 score and how you can build a strong credit profile from scratch.

What Does a -1 CIBIL Score Indicate?

A one-score credit score indicates that the individual does not have a credit history with any lending institution yet. This could be because:

• You have never taken any loan or credit card before
• None of your financial transactions have been reported to CIBIL yet
• You may have an old credit history, but there were no new transactions in the last 2 years

This does not necessarily mean that you have a bad credit score. It simply indicates an absence of credit information as per CIBIL records.

What is the Difference Between CIBIL Score 0 and -1?

Both scores mean you’re still new to credit. But there’s a small difference:

• CIBIL Score -1: You have no credit history at all
• CIBIL Score 0: You’ve used credit but for less than six months. So the bureau doesn’t have enough data yet

CIBIL also uses a TransUnion score between 1 to 5 for some new borrowers. Where 1 indicates high risk and 5 is low risk. This is different from the usual 300-900 range. And this helps lenders assess new applicants more precisely.

Is a -1 CIBIL Score Good or Bad?

It’s not bad, it’s neutral. A -1 score just means you haven’t used credit yet. The good news? You can start building your credit profile the right way from day one. Many lenders now offer first-time borrower products to help you get started.

Benefits of Starting with No Credit History

Here’s why starting from scratch can be an advantage:

• Build credit your way: You have a clean slate to form good habits like timely payments and low credit use.
• Access beginner-friendly products: Secured cards or credit builder loans can help you get started without much risk.
• New-to-credit support: Some lenders offer loans even if you’re new to credit, based on alternate data models.
• No baggage: You don’t carry any missed payments, high debts or credit mistakes from the past.

How is a CIBIL Score Calculated?

A CIBIL score is calculated based on your credit report using the below parameters:

• Payment History: Track record in repaying past loans and credit cards. This gets 35% weightage.
• Credit Exposure: Your total debts, like loan amounts, are pending. Higher debt lowers the score. 30% weightage.
• Credit Mix: It consists of various types of loans and credit cards held, with a 15% weightage.
• Credit Age: For how long you have held loans and credit cards. Older is better. 10% weightage.
• New Credit Applications: Frequency of new credit applications. Many applications have lower scores. 10% weightage.

Since you don’t have any credit history in case of a one credit score, none of these parameters can be used to calculate your score.

How to Improve a -1 CIBIL Score?

Here are some ways to build your CIBIL score if you have a -1 score right now:

• Get a Secured Credit Card: This requires a fixed deposit as collateral. Use it responsibly.
• Apply for a Credit Builder Loan: This is a small loan to establish a credit history. Repay it on time.
• Become Co-applicant: Be a joint applicant with someone who has a high credit score.
• Availing Loans: Take a small loan like a personal loan and repay diligently to build credit.
• Report Rent: Get rent payments reported to CIBIL to establish a payment track record.

Therefore, checking your CIBIL report and building your credit score is wise. A -1 CIBIL score indicates you need to establish a credit history. With smart financial habits, you can build a strong score over time. Monitor your score and report regularly for errors or discrepancies. A robust CIBIL score makes it easier to avail credit on favourable terms when needed.

You can opt for the Fibe Instant Personal Loan to bridge monetary gaps. When you apply with Fibe, we assess your creditworthiness based on an alternative credit score mechanism. This allows us to approve applicants with lower CIBIL scores as well.

Download the Personal Loan App or visit our website to apply now.

Frequently Asked Questions

How do I improve my CIBIL score from -1 to 800+ in six months?

Going from -1 to 800+ in just six months may be unrealistic. However, you can aim to improve to 700+ in six months by:

• Getting 2-3 secured cards and keeping utilisation under 30%
• Taking a credit builder loan for 6 months and repaying on time
• Becoming an authorised user on a credit card with high limits
• Availing and prepaying a short-term personal loan
• Ensuring no missed payments or defaults

The key is to have a mix of credit types and demonstrate exemplary repayment across all debts. Limit new applications and let your score build with time. Be patient and adopt sound money management habits.