The bank number on a card is the first 4 to 6 digits mentioned on all payment cards. Also known as the Bank Identification Number or BIN for short, it is an essential component of your card number. It helps track stolen cards and reduces the chances of theft.
You’ll find the Bank Identification Number on various types of payment cards. These include:
Credit cards
Gift cards
Debit cards
Charge cards
Read on to learn what is BIN, where you can check BIN and more.
What is a Bank Identification Number on a Card?
The Bank Identification Number is a security measure that helps protect consumers as well as merchants engaging in transactions. It compares the data received from BIN to the data of the cardholder and hence, helps avoid identity theft, stolen card issues and credit card fraud.
Consider a bank card number example of 5656 3825 2209 1124. Here, the first set of four to 6 numbers is the BIN or the issuer identification number. A successful online transaction needs authorisation and clearance. This bank number on a cardhelps authorise the payment and identify the card issuer entitled to get the authorisation request for further verification.
The authorisation process includes a thorough check of the numbers against a third-party service provider. The payment processors of most e-commerce retailers check BIN against the maintained BIN lists.
What are the Benefits of a Bank Identification Number?
Here are a few advantages of this crucial bank number on a card:
It helps verify the identity of the purchaser
It helps avoid identity theft and other financial fraud
It confirms the validation of the transaction by requiring the purchaser to provide their credit card number and the card type
It saves time by checking whether an online merchant accepts a credit card before the authorisation request
In a BIN scam, fraudsters pretend to be from your bank and say that your account information is compromised. They may provide your personal and financial details to gain your trust. Once they get you involved, they can extract additional details of your bank account.
Once they get this information, they will give you your BIN and request you to confirm the remaining digits of your card and other information. Remember, these fraudsters can also generate numbers from a valid BIN and test them to carry out online transactions to find an active number.
How to Prevent a Bank Identification Number Scam?
Merchants can avoid such scams by verifying transactions with the help of the BIN. They can identify potential fraud by checking the billing addresses and bank locations. Merchants can also contact the issuer for verification if they suspect any suspicious transactions.
To help you get better clarity on how BIN works, here is an example.Say you need to purchase a dress from an offline store in a mall. After choosing the dress, you decide to make the payment through your credit card. To do so, you need to swipe your credit card in their machine.
Once you swipe the card, the system determines the specific credit card issuer through BIN.The merchant then sends an authorisation request to your credit card account. The transaction gets authorised after the approval of the request. If the purchase amount is higher than your credit card limit, the request gets declined.
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FAQs on Bank Identification Number (BIN)
How do I find my Bank Identification Number?
The Bank Identification Number, or BIN, is a part of the bank number on a card. It is the first 4 to 6 digits of the number.
For instance, consider a bank card number example 3582 6674 3823 0191. Here, the first digit starting from 3 up to the digit 6 is referred to as BIN.
What is the Bank Identification Number in the passbook?
A Bank Identification Number, or BIN, is a set of 4 to 6 numbers that help identify the credit card issuer. You can check BIN on your credit, debit or other payment cards.
How many digits constitute a Bank Identification code?
ABank Identification Number, or BIN, includes 4 to 6 digits.
What is a bank card number?
A bank card number is the unique identification number of a card issued by the bank. Credit cards, debit cards, and other such payment cards have a unique bank card number.
What is a Bank Identification Number?
A Bank Identification Number includes 4 to 6 digits that identify the credit card issuer. You can easily check BIN on your credit, gift or other payment cards.
The Cash Reserve Ratio (CRR) is the percentage of a bank’s Net Demand and Time Liabilities (NDTL) that it must maintain as cash reserves with the Reserve Bank of India (RBI). The RBI uses CRR as a monetary policy and liquidity-management tool. Banks do not earn interest on the balance they maintain with the RBI as CRR.
CRR can influence the amount of money banks have available to lend. When the RBI raises CRR, banks must keep a larger share of their funds with the RBI, which can reduce lendable resources. When the RBI lowers CRR, it releases more funds into the banking system. These changes may influence credit availability and lending rates, although loan pricing also depends on several other factors.
Read on to understand the cash reserve ratio meaning, current CRR rate, calculation, objectives, penalties and its impact on borrowers and depositors.
What is the Cash Reserve Ratio?
The Cash Reserve Ratio is the share of a bank’s NDTL that it must maintain with the RBI in cash. NDTL broadly represents the bank’s demand and time liabilities after applying the RBI’s prescribed adjustments for liabilities and assets with the banking system.
As of the latest RBI current-rates information verified in August 2026, the CRR is 3.00% of NDTL. RBI reduced the CRR by 100 basis points in four tranches during 2025, with the final 3.00% rate becoming effective from the reporting fortnight beginning 29 November 2025.
How is the Cash Reserve Ratio Calculated?
Banks calculate CRR as a percentage of their NDTL. A simple representation is:
CRR requirement = NDTL × CRR rate
For example, if a bank has NDTL of ₹1,000 crore and the CRR is 3.00%, it must maintain ₹30 crore with the RBI as CRR.
NDTL is more than just customer deposits. In simple terms, it covers demand liabilities such as balances payable on demand, time liabilities such as certain term deposits, and relevant inter-bank liabilities after adjustments prescribed by the RBI.
When the RBI increases CRR, banks need to maintain more funds with the RBI, which can reduce the funds available for lending. A lower CRR does the opposite and can add liquidity to the banking system.
Penalties for Not Maintaining CRR
Banks must maintain CRR in line with RBI requirements. If a bank falls short of the prescribed requirement, the RBI can levy penal interest on the shortfall.
First-day shortfall: Penal interest is charged at 3 percentage points above the RBI Bank Rate on the amount of the shortfall.
Continued shortfall: If the shortfall continues on succeeding days, the penal rate rises to 5 percentage points above the Bank Rate.
Worked example: Assume a bank has a CRR shortfall of ₹10 crore for one day and the RBI Bank Rate is 5.50%. The applicable penal rate would be 8.50% per annum (5.50% + 3.00%). The approximate penal interest for that one-day shortfall would be about ₹23,288. If the shortfall continues, the applicable annual penal rate would rise to 10.50% (5.50% + 5.00%), subject to RBI rules.
Objectives of CRR
Manage banking-system liquidity: CRR allows the RBI to absorb or release liquidity by changing the share of NDTL that banks must keep with it.
Support monetary policy: The RBI can use CRR alongside other tools to influence liquidity conditions and monetary transmission.
Help control inflationary pressure: A higher CRR can reduce the amount of funds available for lending, which may moderate excess liquidity and demand.
Support growth when liquidity is tight: Lowering CRR can release funds to banks and increase their capacity to lend, depending on credit demand and other conditions.
Impact of Cash Reserve Ratio
CRR directly affects the amount of funds that banks must keep with the RBI and therefore influences banking-system liquidity. Its effect on borrowers, depositors and interest rates is usually indirect rather than automatic.
Less money available to lend: A higher CRR requires banks to keep more money with the RBI, reducing the pool of funds that can potentially be used for lending.
Borrower vs depositor impact:
Borrowers: A higher CRR may tighten liquidity and put upward pressure on loan pricing or credit availability. However, lending rates also depend on policy rates, funding costs, competition, credit risk and the lender’s pricing strategy.
Depositors: CRR does not directly set savings or fixed-deposit rates. Banks may adjust deposit rates depending on their funding and liquidity needs.
Helps manage inflation: Increasing CRR can absorb liquidity from the banking system and may help moderate demand-side inflationary pressure.
Supports liquidity when lowered: A lower CRR releases funds into the banking system and can increase banks’ capacity to extend credit.
Can influence loan access: Changes in liquidity conditions may affect how actively banks lend, but approval still depends on the borrower’s eligibility, credit profile and the lender’s policies.
At the current CRR of 3.00%, a bank must maintain ₹3 with the RBI for every ₹100 of NDTL. For NDTL of ₹1,000 crore, that equals ₹30 crore.
Why Does RBI Change CRR?
The RBI changes CRR from time to time to manage liquidity in the banking system and support its broader monetary policy objectives. It may raise CRR when it wants banks to keep more funds with the RBI and reduce excess liquidity. It may lower CRR when it wants to release liquidity and increase the banking system’s capacity to lend.
CRR is only one of several monetary policy tools. The RBI also uses instruments such as the policy repo rate, Standing Deposit Facility and other liquidity-management operations. As a result, changes in CRR should be viewed along with the broader monetary policy environment.
Understanding CRR can help you see how RBI policy can influence liquidity, credit conditions and borrowing costs. If you are considering a personal loan, compare the interest rate, EMI, tenure and total repayment amount before applying.
With a Fibe Personal Loan, eligible customers can borrow up to ₹10 lakhs, subject to eligibility and approval. Fibe’s current published personal-loan pricing starts from 18% per annum on a reducing-balance basis, with the applicable rate depending on the borrower’s profile and loan terms.
FAQs on Cash Reserve Ratio (CRR)
1. What is the Cash Reserve Ratio in India by the RBI?
The Cash Reserve Ratio is the percentage of a bank’s NDTL that it must maintain with the RBI as cash reserves. The current CRR is 3.00% of NDTL, based on the latest RBI current-rates information verified in August 2026.
2. How do you calculate the Cash Reserve Ratio?
Multiply the bank’s NDTL by the applicable CRR rate. For example, with NDTL of ₹1,000 crore and a CRR of 3.00%, the bank must maintain ₹30 crore as CRR with the RBI.
3. What happens when the Cash Reserve Ratio increases?
When the RBI increases CRR, banks must keep a larger share of their NDTL with the RBI. This can reduce liquidity available for lending. In turn, credit conditions may tighten and lending rates may face upward pressure, although the final impact depends on several market and bank-specific factors.
4. What is CRR?
CRR stands for Cash Reserve Ratio. It is the percentage of a bank’s NDTL that the bank must maintain as cash reserves with the RBI. The RBI uses CRR to help manage liquidity in the banking system.
5. What is the Difference Between CRR and SLR?
CRR is the share of a bank’s NDTL kept as cash with the RBI, while SLR is maintained by the bank in eligible liquid assets such as cash, gold and approved securities. Currently, CRR is 3.00% and SLR is 18.00%
6. What is the Current CRR Rate in India?
The current CRR in India is 3.00% of NDTL, based on RBI’s latest current-rates information verified in August 2026. RBI reduced CRR to 3.00% in four tranches during 2025, with the final reduction taking effect from the reporting fortnight beginning 29 November 2025.
Be it an Equifax credit report or a CIBIL credit report, all lenders check your credit history and score while reviewing your application for any type of credit. These details give them insights about your financial standing and creditworthiness.
However, you don’t get the same score from all bureaus, nor do all lenders access your credit report from the same bureau. Some may use the report generated by TransUnion CIBIL, while some rely on Equifax or other credit bureaus.
Since these reports have an impact on your eligibility, understanding the difference between them is crucial in choosing a lender with whom you have the best chances of approval.
So, read on to know what CIBIL and Equifax scores are, their differences, steps to check them and more.
What is the CIBIL Score?
Generated by TransUnion CIBIL, your CIBIL score is a three-digit numeric representation of your creditworthiness. It ranges between 300 and 900 and a higher score represents a good credit history and behaviour. The bureau calculates this score based on the information present in your CIBIL report.
Your CIBIL report includes all your account details, such as repayment history, types of credit taken, number of accounts, account duration and more. TransUnion CIBIL assigns a fixed weightage to the four main credit factors in the following manner:
This is also a three-digit score ranging between 300 and 900 generated by Equifax Credit Information Services Private Limited. Given this, the scoring method differs, and therefore, your score does too.
To calculate your score, the bureau allocates the following weightage to these credit factors:
Payment history: 35%
Credit utilisation: 30%
Credit length: 15%
Types of credit: 10%
Number of new credit applications: 10%
Differences Between CIBIL and Equifax
Here are the key differences between the two credit bureaus:
Particulars
CIBIL
Equifax India
Date Established
2000
2010
Credit Report
CIBIL credit report gives detailed information under different categories
Equifax credit report has in-depth data along with a pictorial representation
Credit Score Range
300-900
300-900
Factors considered
Repayment history, credit exposure, type, and duration
Repayment history, credit utilisation, credit length and type
Dispute resolution
Can raise a dispute online and offline
Can file a dispute through the website or by emailing nodal officers
Subscription
₹550 onwards
₹250 onwards
How to Check Your CIBIL and Equifax Scores for Free
You can get one free CIBIL and Equifax credit report with a credit score annually, which you can generate on the respective bureau’s official website.
Here are the steps to get a free credit report and score from the CIBIL website.
Step 1: Go to the CIBIL website
Step 2: Click on ‘Get Free CIBIL Score & Report’
Step 3: Enter the required details and click on ‘Accept and Continue’
Step 4: Verify your identity with an OTP on your registered mobile number
To generate a free Equifax credit report with your credit score, follow these steps:
Step 1: Visit the Equifax India website and click on ‘Get Started’
Step 2: Create an account with your name, email address and mobile number
Step 3: Verify with OTP
Step 4: Review and verify your KYC details
Step 5: Go to your account dashboard and click on ‘Run your Free Report’
Once you have downloaded the credit reports, you can check your scores and review your credit history. If you notice any errors or discrepancies in either of the reports, you can raise a dispute with the concerned bureau.
How to Improve Your Credit Score
If you notice a low score while reviewing your CIBIL or Equifax credit report, here are some tips you can implement to improve it.
Review the report to ensure information is accurate and raise a dispute if it isn’t
Make all your future repayments on time
Bring your credit utilisation under 30% if it is higher
Avoid applying for multiple credit facilities frequently
Assess the credit types you have experience with and try to ensure a healthy mix going forward
Keep older credit card accounts open to have a record of good repayment behaviour over a period of time
With these tips, you can easily improve your score. Remember, most lenders prefer a credit score of 700 and above. However, with Fibe, you can apply for a loan without worrying about your credit score.
We rely on a proprietary alternative credit scoring method and thus, offer credit to borrowers who are new to credit or have less-than-ideal scores. You can easily apply for an Instant Personal Loan and get up to ₹5 lakhs with minimal paperwork and at a pocket-friendly interest rate. Download our Personal Loan App or register on the website to apply.
FAQs on CIBIL Vs Equifax Scores
Which is better, CIBIL or Equifax?
Both bureaus are equally good in terms of reliability and validity. However, TransUnion CIBIL is more commonly used by Indian financial institutions.
Is Equifax an accurate credit score?
Yes. However, there may be a possibility of discrepancy if the information submitted by the financial institution is not updated to the latest transaction or if you have made a payment after the institution has submitted your details. In this case, you can raise a dispute to rectify the errors.
What is a good score in Equifax?
The credit score for Equifax ranges between 300 and 900, but any score above 700 is considered a good score. However, this may vary depending on the financial institution you choose.
Prepaid expenses include all the bills and financial obligations for products or services for which you pay in advance. Business owners often make recurring payments in advance to avoid any last-minute delays and hassles.
Doing this also allows businesses to relieve themselves of obligations in future accounting periods. Once paid, you can utilise the goods and services, which makes funds available for other expenses.
Read on to learn the meaning of prepaid expenditure, how it works, examples, benefits and more.
Prepaid Expense Meaning
Often, companies pay their bills in advance for the services they will use in the future. These are known as prepaid expenditures or expenses, and you can’t use them within the existing financial period. Generally, people pay in advance for recurring expenses such as rent, insurance, payment for orders, subscriptions, etc.
How do Prepaid Expenses Work?
Let’s say you paid for any future expense before the due date but can’t use the product or service yet. You will receive the benefits of the service or goods over a period of time. As such, they fall under the assets section.
Then, as and when you receive the benefits of the product or service, the cost will be recorded as an expense. This way, the prepaid expenses would align with the benefit over time. So, as you consume the benefits the amount will get deducted from the advance payment account and added to the expense period.
According to the Generally Accepted Accounting Principles (GAAP), a company’s balance sheet cannot mention the prepaid expense under immediate expenses. As the expenses do not line up with the benefit incurred, such expenses will become current assets.
So, the entry for it will be first recorded in assets and cash accounts, where the expenses will be recorded as debit, and the cash account will be credited for the same amount. With time, the amount will get credited from the asset accounts and debited into the expense account. Over time, these entries will cancel each other as the asset value will drop until it reaches zero, and simultaneously, the expense will rise.
In accounting, this adjustment, known as a prepaid expense amortisation, allows you to maintain the balance between credit and debit.
Example of a Prepaid Expense
To understand prepaid expenses better, consider this example: Let’s say you make a bulk order for material worth ₹15,000 per month. Now, if you wish to pay the bill a year in advance, then you must pay ₹1,80,000 in advance.
Now, you can deduct ₹15,000 from the prepaid amount every month and add it to your monthly expense account entry. At the end of 12 months, your prepaid balance will reach zero, and the total annual expense for ordering material will add up to ₹1,80,000.
Businesses make prepayment for many benefits, some of which are as follow:
Track Expenses
By making an advance payment, you have the option to easily track the unused amount when asking for refunds. Moreover, you can also calculate the total cost of the product or service and then choose a more pocket-friendly option if available.
Save More
Often, business partners will give discounts on making bulk or advance payments; this way, prepaid expenditure is a cost-saving solution. Furthermore, in case you don’t have cash outflow in the following month, making advance payments allows you to continue work unrestricted until you get the funds.
Another benefit of making advanced payments is that it allows you to lock in the current rates. So, if your rent increases or the cost of raw materials rises, you do not have to bear the burden as you have paid in advance.
Save Tax
Paying in advance allows you to save on taxes, as you can only record the expenses for the year they incurred. Therefore, as per the rule of accounting, you don’t have to pay the taxes for the year when you redeem its benefits.
Now that you know the meaning of prepaid expenses, their benefits, and entry, you can ensure your operations run smoothly. However, to pay for such assets, you must have cash in hand, which is where Fibe can help you.
With Fibe’s instant Personal Loan, you can get up to ₹5 lakhs without any end-use restrictions. You can also enjoy an affordable interest rate with minimal documentation and no pre-closure charges. Download the Personal Loan App or register on our website to apply.
FAQs on Prepaid Expenses
Where are prepaid expenses on the balance sheet?
The record of all prepaid expenses in a balance sheet is under the current asset sections.
Are prepaid expenses an asset or liability?
You must note all the prepaid expenditures as assets on a balance sheet, as the payments made for goods and services in advance will aid in the future.
What is the entry of a prepaid expense?
Entry of a prepaid expenditure first comes under assets and cash account, where the asset account will be debited, and the cash account will be credited. Then, as you use the asset (realise the benefit of the expenses), the prepaid expense account gets debited, and the expenses account gets credited.
Gradually, the funds from the prepaid expense account get transferred to the expense account.
A car loan balance transfer is a great way to reduce your borrowing costs as you can switch to another lender offering better terms. You benefit from higher financial flexibility while getting a number of other advantages.
However, like every financial decision, a car loan balance transfer also requires adequate research. You must choose a lender that offers better terms to ease your repayment. Check the vehicle loan details before you transfer it to another lender. Doing so helps ensure that you are saving on your repayment.
Read on to learn how to check the details of your car loan, the process to transfer the loan and more.
Ways to Check Your Car Loan Balance
Here are the ways through which you can check the details of your vehicle loan:
Lender’s Portal or Mobile App
Financial institutions offer online portals and mobile apps through which you can easily know the details of your car loan. By logging in to the portal or on the app, you can know the outstanding loan amount, amount paid, next EMI date, interest rate, tenure and other information.
Loan Statements
Lenders periodically send loan statements via email or post to your address. These statements include details, such as the outstanding balance, the tenure, rates and other loan terms.
Customer Care
Another way to check the details of your car loan is by contacting the lender’s customer care team. You can connect with them via phone, email, SMS and other modes. They will provide the outstanding loan amount and other details of your car loan after verifying your details.
Check out the steps you need to follow to apply for a balance transfer of a car loan:
Step 1: Check the Terms of Your Ongoing Loan
You need to check with your current lender to see if they allow the balance transfer facility. For more clarity and a seamless process, you must initiate a quick vehicle loan details check by logging into your account, checking the statements, or contacting the customer service team.
Step 2: Research and Find a Suitable Car Loan Provider
Choosing a suitable lender for the balance transfer is also essential. You need to pay attention to the interest rates, loan tenure, associated charges and other factors. This will help ensure that you save more and have a stress-free repayment experience.
Step 3: Check the Eligibility Criteria
You also need to meet the eligibility criteria set by the new lender. You can know the requirements by visiting the lender’s website or contacting their customer care team. Checking your credit score is also important as a higher score can increase the chances of approval.
Step 4: Keep the Required Documents Handy
For a smooth transfer of your car loan, check the document requirements and keep them handy for submission.
Step 5: Submit the Application
Once you have everything ready, visit the lender’s website or branch to submit your balance transfer application. After the new lender processes and approves it, your loan with the existing lender will be paid off and you will repay the loan as per the new terms.
Financial Documents: Salary slips and bank statements for the last 3 months
Vehicle registration certificate
Copy of the vehicle insurance
Note: The document requirements may vary with different financial institutions.
With this information in hand, you can easily apply for a balance transfer of a car loan. If the savings in balance transfer is not ideal for you, consider getting a personal loan to consolidate your loans or pay off the car loan entirely. Fibe offers affordable Personal Loans of up to ₹5 lakhs. With this loan, you enjoy instant disbursal with no restriction on end-use.
Download the Personal Loan App or register on our website to enjoy a quick and easy application process!
FAQs on How to Check Car Loan Balance and Transfer the Loan
What is a car loan balance?
A car loan balance is the outstanding amount of the loan that you need to repay.
Can I sell my car with a loan?
No, you can’t sell a car without clearing the car loan.
Can I transfer a car loan to another person?
Yes, some financial institutions may allow you to transfer the car loan to another person. You can know this by doing a quick vehicle loan details check.
Can a hypothecated car be sold?
No, you can’t sell a car without removing the hypothecation.
In business, especially international trade, buyers and sellers may operate in different countries, follow different legal systems, or have no previous trading relationship. A letter of credit can reduce payment risk by giving the seller a bank-backed payment undertaking, provided the documents submitted meet the terms of the credit.
For the buyer, an LC can make it easier to trade without paying the full amount before shipment. For the seller, it provides greater payment assurance than relying only on the buyer’s promise to pay. However, banks examine the documents required under the LC; they do not inspect or guarantee the quality of the underlying goods. Read on to understand the meaning, process, documents, types, charges and application steps.
Letter of Credit Meaning
LC full form is Letter of Credit.
A letter of credit is a formal undertaking issued by a bank or financial institution, usually at the request of a buyer (the applicant), in favour of a seller (the beneficiary). The issuing bank agrees to honour payment when the beneficiary presents documents that comply with the terms and conditions stated in the LC.
Letters of credit are commonly used in domestic and international trade where the parties want greater payment certainty. The LC is separate from the underlying sale contract, and the bank’s decision to honour it is based on the required documents rather than the physical goods or services themselves.
How Does a Letter of Credit Work?
A typical letter of credit transaction begins after the buyer and seller agree that payment will be made through an LC. The buyer applies to an issuing bank, which assesses the buyer’s creditworthiness and may ask for a margin, collateral or other security depending on the facility and the bank’s policy.
Once approved, the issuing bank sends the LC to an advising bank, usually in the seller’s country. The seller reviews the terms and, if acceptable, ships the goods and prepares the documents required by the LC. These may include the commercial invoice, transport document, packing list, certificate of origin and other specified records.
The seller presents the documents through the relevant bank. The banks examine the presentation against the LC terms. If the documents comply, the issuing bank honours the LC according to its payment terms, such as sight payment or deferred payment. The buyer then reimburses the issuing bank as agreed and receives the documents needed to take delivery of the goods.
Importantly, the bank does not normally take possession of or verify the goods. Its role is centred on the documentary presentation and the payment undertaking.
Documents Required for a Letter of Credit
There is no single document list for every LC. Requirements depend on the transaction, product, country, transport method, bank policy and wording of the credit. Common documents can be grouped into two categories:
Documents the buyer may need when applying for an LC:
Completed LC application or trade-finance request form
Sales contract, purchase order or pro forma/commercial invoice containing the agreed trade terms
KYC and business documents required by the issuing bank
Import/export or regulatory documents, where applicable
Margin, collateral or security-related documents if required after the bank’s credit assessment
Documents that may be required from the seller for payment under the LC:
Commercial invoice
Bill of lading, airway bill or another applicable transport document
Packing list
Certificate of origin
Insurance policy or certificate, where applicable
Inspection, quality, weight or quantity certificate, if stipulated
Bill of exchange, if required
Other licences, declarations or regulatory documents specified in the LC
The exact list should be confirmed with the issuing bank and matched carefully to the LC terms, because missing or inconsistent documents can lead to discrepancies and delay payment.
Types of Letters of Credit
Some commonly used types of letters of credit include:
1. Sight Letter of Credit: Payment is made after the beneficiary presents complying documents and the bank completes its examination.
2. Standby Letter of Credit: Acts mainly as a backup payment undertaking and is generally invoked if the applicant fails to meet the specified obligation.
3. Usance or Deferred Payment Letter of Credit: Payment is due at a future date or after an agreed credit period rather than immediately on presentation.
4. Irrevocable Letter of Credit: Cannot be amended or cancelled without the agreement required under the applicable LC terms and rules. Under UCP 600, a documentary credit is irrevocable.
5. Confirmed Letter of Credit: A second bank adds its own undertaking to that of the issuing bank, giving the beneficiary additional payment assurance.
6. Transferable Letter of Credit: Allows the first beneficiary to request transfer of all or part of the credit to a second beneficiary when the LC expressly states that it is transferable.
A “revocable LC” is a legacy concept and should not be treated as the standard form under UCP 600, which defines a credit as irrevocable.
How to Apply for a Letter of Credit?
The exact process varies by bank and transaction, but a typical LC application and settlement flow is as follows:
1. Agree on the sales contract: The buyer and seller finalise the price, goods or services, shipment terms, payment terms and the decision to use an LC.
2. Apply to the issuing bank: The buyer submits the LC application along with the commercial terms and supporting documents required by the bank.
3. Complete the bank’s assessment: The issuing bank reviews the buyer’s credit profile, transaction details, available limits and any margin or security requirement.
4. LC issuance and advising: After approval, the issuing bank issues the LC in favour of the seller and sends it to the advising bank, which authenticates and advises it to the seller.
5. Seller reviews and ships: The seller checks the LC terms and, if acceptable, ships the goods or performs the agreed obligation within the stipulated period.
6. Present and examine documents: The seller submits the required documents through the nominated, advising or confirming bank, as applicable. The banks examine them for compliance with the LC terms.
7. Payment and document release: If the presentation complies, the LC is honoured according to its terms. The issuing bank obtains reimbursement from the buyer as agreed and releases the relevant documents so the buyer can claim the shipment.
Before applying, the buyer should confirm that the LC wording matches the underlying commercial agreement and that all documentary requirements can realistically be met. Even small discrepancies can lead to delays, amendment costs or refusal of a presentation.
Charges and Fees for a Letter of Credit
There is no single fixed charge for a letter of credit. The total cost depends on factors such as the LC amount, validity or tenor, the applicant’s credit profile, transaction structure, countries and banks involved, and whether additional services such as confirmation are required.
Common LC-related charges may include:
Issuance or opening commission
Advising charges
Confirmation charges, where a confirming bank adds its undertaking
Amendment charges for changes after issuance
Document examination or handling charges
Negotiation, payment or reimbursement charges
Acceptance or deferred-payment charges for usance LCs
SWIFT or other communication charges
Discrepancy fees where documents do not comply
Foreign-exchange conversion costs and applicable taxes
The buyer and seller should also agree who will bear the issuing bank, advising bank, confirming bank and overseas bank charges. Always refer to the bank’s current schedule of charges or written sanction terms rather than assuming a standard percentage.
Understanding how a letter of credit works can help businesses reduce payment uncertainty in transactions where the buyer and seller need additional assurance. The key is to agree on practical LC terms and ensure that every required document matches those terms.
If you need funds for eligible personal expenses, Fibe offers personal loans of up to ₹10 lakh, subject to eligibility and approval. Current product information lists rates starting from 18% p.a., tenures from 6 to 36 months and nil foreclosure charges. Check the applicable offer, fees and terms before borrowing.
FAQs on Letter of Credit (LC)
1.Why is it called a letter of credit?
It is called a letter of credit because the issuing bank provides a written credit undertaking in favour of the beneficiary. The bank agrees to honour payment when the beneficiary submits documents that comply with the LC terms.
2.What is the difference between LC and BG?
A letter of credit is generally used as a primary payment mechanism: the bank honours payment against a complying documentary presentation. A bank guarantee is more commonly a secondary or default-based undertaking that may be invoked when a contractual obligation is not fulfilled. The exact legal effect depends on the wording of the instrument.
3.What is the process of LC?
The buyer and seller agree to use an LC, the buyer applies to the issuing bank, and the bank issues the LC in favour of the seller. The seller ships the goods and presents the required documents. If the documents comply with the LC terms, the bank honours payment according to the agreed sight or deferred-payment terms.
4.What is the full form of LC?
LC stands for Letter of Credit. It is a bank-issued payment undertaking commonly used in trade transactions to provide the seller with payment assurance against a complying documentary presentation.
5.How much does a letter of credit from a bank cost?
There is no universal LC fee. Costs vary by the LC amount, tenor, type, applicant’s credit profile and banks involved. Charges may include issuance, advising, confirmation, amendment, document-handling, SWIFT, discrepancy, foreign-exchange and applicable taxes. Check the issuing bank’s latest tariff or sanction terms for the actual cost.
Paper money made everyday transactions easier by offering a lightweight and convenient alternative to carrying large quantities of coins. Even with the rapid growth of UPI, cards and digital payment apps, physical currency continues to be an important medium of exchange.
In India, the Reserve Bank of India (RBI) has the sole right to issue banknotes under the RBI Act, 1934. An exception is the ₹1 note, which is issued by the Government of India. RBI banknotes are legal tender and are guaranteed by the Central Government.
Read on to understand the paper money meaning, its history in India, how currency notes are printed, the different types of paper money, and its advantages and disadvantages.
What is Paper Money?
Paper money refers to physical banknotes or currency notes that are used as a medium of exchange for goods and services.
In India, most banknotes are issued by the Reserve Bank of India. Each note has a specified face value and can be used as legal tender for making payments. The ₹1 note is an exception and is issued by the Government of India.
Modern paper money is generally fiat money. This means its value does not come from the value of the material used to make the note or from a right to exchange it for a fixed quantity of gold or silver. Instead, its value is supported by law, public acceptance and confidence in the monetary system.
Paper money remains useful because it:
Is easy to carry and exchange
Does not require a smartphone, internet connection or payment app
Can be used for many day-to-day offline transactions
Is widely accepted as legal tender
Helps people who may have limited access to digital payment systems
Although digital payments have grown significantly, cash and digital payments continue to coexist in India.
Brief History of Paper Money in India
The history of modern paper money in India dates to the late 18th century.
Among the earliest issuers was the Bank of Hindostan, which operated from 1770 to 1832. Other early issuers included the General Bank in Bengal and Bahar and the Bengal Bank. Later, the Presidency Banks of Bengal, Bombay and Madras also issued notes.
Some important milestones include:
Late 18th Century – Early Banknotes
Private and semi-government banks began issuing paper currency. The Bank of Hindostan was among the earliest institutions to issue banknotes in India.
1861 – Paper Currency Act
The Paper Currency Act of 1861 gave the Government of India the monopoly over issuing notes. This ended the note-issuing rights of private and Presidency Banks.
1928 – Printing Begins in India
The Currency Note Press at Nashik began operations in 1928. By 1932, it was printing the full range of Indian currency notes then in circulation.
1935 – Reserve Bank of India Established
The Reserve Bank of India began operations on 1 April 1935 and took over currency management functions from the Government’s Controller of Currency.
Since then, the RBI has played the central role in issuing and managing banknotes in India.
How is Currency Printed in India?
Indian banknotes are specially designed to withstand regular handling and include several security features.
The currency paper currently used for printing Indian banknotes is made using 100% cotton.
Banknotes are currently printed at four presses in India:
Currency Note Press, Nashik, Maharashtra – managed by Security Printing and Minting Corporation of India Limited (SPMCIL)
Bank Note Press, Dewas, Madhya Pradesh – managed by SPMCIL
Bank Note Press, Mysuru, Karnataka – managed by Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL)
Bank Note Press, Salboni, West Bengal – managed by BRBNMPL
BRBNMPL is a wholly owned subsidiary of the RBI.
The RBI estimates how many banknotes need to be printed based on factors such as:
Expected demand for currency
Notes already in circulation
Replacement of soiled or damaged notes
Economic growth
Inflation
Interest rates
Growth in non-cash payment methods
It then places printing requirements with the currency presses in consultation with the Government of India.
After printing, banknotes are distributed through RBI Issue Offices and a nationwide network of currency chests before reaching bank branches and the public.
How Does Paper Money Work?
Paper money works because people, businesses and institutions recognise and accept it as money.
Modern Indian banknotes are an example of fiat currency. Their purchasing power does not depend on the value of the cotton used to produce them.
Instead, their value is supported by:
Their legal tender status
The monetary system
Government guarantee
Public confidence
Economic conditions
Monetary policy
For example, a ₹500 note costs far less than ₹500 to physically manufacture. However, it can be used to purchase goods or services worth ₹500 because it is recognised as currency.
The value or purchasing power of money can change over time because of inflation and wider economic conditions. An excessive expansion of money relative to the supply of goods and services can contribute to inflation, although inflation can have several other causes as well.
The RBI therefore manages currency along with broader monetary policy to support monetary and financial stability.
Types of Paper Money
Paper money can be classified into different types based on how its value is determined and whether it can be exchanged for another asset.
1. Representative Paper Money
Representative paper money represents a claim on an underlying asset such as gold or silver.
Historically, the holder could exchange the note for a specified amount of the asset backing it.
2. Convertible Paper Money
Convertible paper money can be exchanged into a specified amount of a commodity or standard money, such as gold or silver, subject to the issuing system’s rules.
3. Inconvertible Paper Money
Inconvertible paper money cannot be exchanged on demand for gold, silver or another commodity at a fixed rate.
Its acceptance depends instead on the monetary and legal framework under which it is issued.
4. Fiat Money
Fiat money is currency whose monetary value is established by law and public acceptance rather than by the intrinsic value of the material from which it is made.
Most modern currencies, including the Indian rupee, operate primarily as fiat currencies.
Advantages and Disadvantages of Paper Money
Paper money has several benefits, but it also has limitations compared with electronic payment methods.
Advantages of Paper Money
Disadvantages of Paper Money
Lightweight and easier to carry than large quantities of coins
Can be lost or stolen
Easy to use for everyday transactions
Physical notes can become damaged or worn
Does not require internet connectivity
Counterfeit currency can be a risk
Does not require a smartphone or payment app
Handling, transporting and storing cash involves costs
Widely accepted for offline transactions
Large cash transactions can be inconvenient
Useful for people with limited access to digital services
Cash transactions may be harder to track or reconcile
Provides an immediate mode of payment
Requires printing, distribution, replacement and security infrastructure
Paper money and digital payments therefore serve different needs rather than necessarily replacing one another completely.
Paper Money vs Digital Payments
The growth of UPI and digital payment apps has changed how people transact, but digital payments are not the same as paper money.
Paper Money
Digital Payments
Physical banknotes are exchanged
Money moves electronically
Can work without a smartphone or internet connection
Usually requires a device and network connectivity
Payment can be completed directly between two people
Generally relies on banks, payment systems and technology infrastructure
Physical cash must be carried and stored
No physical currency needs to be carried
Can be lost, damaged or stolen
Digital payments can face risks such as fraud, phishing or technical failures
Useful for offline and small-value cash transactions
Convenient for remote and instant transfers
UPI, for example, is a payment system that enables electronic movement of money between bank accounts. It is not itself a separate form of paper currency.
Understanding paper money helps explain how the monetary system has evolved from physical currency to a mix of cash and digital payments.
Today, consumers can choose between cash, UPI, debit cards and credit cards depending on the transaction.
The Fibe Axis Bank Credit Card is a lifetime-free, UPI-enabled credit card that offers up to 3% cashback on spends, subject to applicable terms and conditions.
Download the Fibe App to explore the card and apply, subject to eligibility and applicable terms.
FAQs on Paper Money
1.What do you mean by paper money?
Paper money refers to physical banknotes or currency notes that are officially issued for use as a medium of exchange.
In India, banknotes are primarily issued by the RBI, while the ₹1 note is issued by the Government of India. These notes can be used to pay for goods and services according to their stated denomination.
2.Why is paper money important?
Paper money is important because it provides a convenient and widely accepted way to make payments.
It is particularly useful when:
Digital connectivity is unavailable
A person does not have access to a smartphone
A merchant prefers cash
Small or offline transactions need to be completed immediately
It also forms an important part of the country’s currency and payment infrastructure.
3.What is the difference between paper money and fiat money?
Paper money describes the physical form of currency, such as banknotes.
Fiat money describes the basis on which currency gets its monetary value. Fiat money is not redeemable for a fixed amount of gold or silver; instead, its value comes from its legal status, acceptance and confidence in the issuing monetary system.
Therefore, paper money can be fiat money, but the two terms do not mean exactly the same thing.
Modern Indian banknotes are an example of physical paper currency operating within a fiat monetary system.
4.Is paper money still relevant with the rise of UPI and digital payment apps?
Yes. Paper money continues to be relevant even as UPI and other digital payment methods grow.
Cash can be used without internet connectivity, a smartphone or payment app and remains useful for many offline transactions.
Digital payments offer advantages such as speed, convenience and remote transfers, while cash offers universal offline usability.
The two payment methods therefore continue to coexist.
5.What are the different types of paper money?
Paper money can broadly be classified as:
Representative paper money – backed by an underlying commodity or asset
Convertible paper money – can be exchanged for a specified commodity or standard money
Inconvertible paper money – cannot be converted into a commodity at a fixed rate
Fiat money – derives its value primarily from law, acceptance and confidence in the issuing monetary system Most modern currencies operate as fiat money.
Knowing the difference between NEFT and RTGS can help you choose the right transfer method based on the amount, urgency and your bank’s available channels. Both are RBI-operated electronic fund transfer systems used to move money between participating bank accounts in India, but they differ mainly in how transactions are settled and the minimum amount required for RTGS.
NEFT processes transfers in half-hourly batches, while RTGS settles eligible transfers individually in real time. Both systems are available 24×7 throughout the year, including weekends and bank holidays.
What is NEFT?
NEFT stands for National Electronic Funds Transfer. It is a nationwide centralised payment system owned and operated by the Reserve Bank of India (RBI). NEFT transactions are processed in half-hourly batches throughout the day and can be initiated through internet banking, mobile banking or a bank branch, subject to the services offered by your bank.
RBI does not prescribe a minimum or maximum amount for NEFT transfers. However, individual banks may set their own transaction limits based on internal policies and the channel used.
What is RTGS?
RTGS stands for Real Time Gross Settlement. In RTGS, each eligible fund transfer is processed and settled individually in real time instead of being grouped into batches. It is mainly designed for high-value transfers.
The minimum amount for an RTGS transfer is ₹2 lakh. RBI does not prescribe an upper ceiling, although a bank may apply its own channel-specific limits or controls.
Details Required for NEFT and RTGS Transfer
Keep the following details ready before initiating a NEFT or RTGS transfer:
Beneficiary name
Beneficiary bank and branch name
Beneficiary account number
Beneficiary account type, where required
IFSC of the beneficiary bank branch
Amount to be transferred
Account to be debited
Sender-to-receiver information or payment remarks, if required
Legal Entity Identifier (LEI) details for transactions where the applicable RBI rules require them
Always verify the beneficiary account number and IFSC carefully before confirming the transfer. The exact fields shown may vary by bank and channel.
Difference Between NEFT and RTGS
Here are the key differences between NEFT and RTGS:
Timings
Both NEFT and RTGS are available 24×7, on all days of the year, including weekends and bank holidays. NEFT operates in 48 half-hourly settlement batches each day, while RTGS processes transactions continuously on a transaction-by-transaction basis.
Minimum and Maximum Limit
RBI does not prescribe a minimum or maximum transfer amount for NEFT. For RTGS, the minimum transfer amount is ₹2 lakh and there is no maximum ceiling prescribed by RBI. Your bank may impose lower channel-specific limits for either system.
Settlement Speed
NEFT is a batch-based system. Transactions are taken up in half-hourly batches, and RBI states that the beneficiary account should generally be credited within two hours of the relevant batch settlement. In practice, many NEFT transfers may be completed sooner.
RTGS settles the transfer in real time at the system level. Under normal circumstances, the beneficiary bank receives the funds as soon as the remitting bank transfers them and must credit the beneficiary’s account within 30 minutes of receiving the RTGS message.
Charges
Charges depend on the transfer type, channel and bank. The figures below are RBI rules or maximum ceilings, not compulsory charges that every bank must levy.
Transfer / Amount
RBI Charge Guidance
NEFT – inward transfer
Nil
NEFT – online transfer from a savings bank account
Nil; banks have been advised not to levy a charge
NEFT – other outward transfer up to ₹10,000
Up to ₹2.50 + applicable GST
NEFT – above ₹10,000 to ₹1 lakh
Up to ₹5 + applicable GST
NEFT – above ₹1 lakh to ₹2 lakh
Up to ₹15 + applicable GST
NEFT – above ₹2 lakh
Up to ₹25 + applicable GST
RTGS – inward transfer
Nil
RTGS – ₹2 lakh to ₹5 lakh
Up to ₹25 + applicable tax
RTGS – above ₹5 lakh
Up to ₹50 + applicable tax
Actual charges can be lower or nil depending on your bank, account type and transfer channel. Check your bank’s current schedule of charges before initiating a transaction.
Which is Better: NEFT or RTGS?
Neither method is universally better; the right option depends on the amount and how quickly you need settlement. NEFT can be used for transfers of different sizes because RBI does not prescribe a minimum amount, making it suitable for routine payments. RTGS is designed for transfers of ₹2 lakh or more and is preferable when real-time settlement is important.
NEFT should not be understood as taking a minimum of 30 minutes or always taking up to two hours. It operates in half-hourly batches, and the two-hour RBI timeline is measured from the settlement of the relevant batch. Actual credit may happen sooner depending on when the instruction enters the batch and the banks involved.
Once you understand the difference between NEFT and RTGS, you can choose the payment method that suits your transfer. For everyday card and UPI payments, the Fibe Axis Bank Credit Card is a numberless RuPay credit card that can be linked to UPI. It currently offers 3% cashback on eligible food delivery, local commute and entertainment spends, and 1% cashback on other eligible spends, subject to the card’s terms and exclusions. You can check eligibility and apply through the Fibe App.
FAQs on NEFT and RTGS
1.Why is RTGS faster than NEFT?
RTGS processes eligible transfers individually and in real time. NEFT processes transactions in half-hourly batches, so the exact credit time depends on when the instruction enters the next batch and when the beneficiary bank credits the account.
2.Which is cheaper, NEFT or RTGS?
The answer depends on your bank, account type and channel. Online NEFT transfers from savings bank accounts should not attract a bank charge under RBI guidance. For other NEFT and RTGS outward transactions, RBI prescribes maximum charge ceilings, but banks may charge less or waive the fee altogether.
3.Can I use NEFT or RTGS for international money transfers?
Generally, NEFT and RTGS are used for transfers within India between participating accounts. NEFT has a specific one-way Indo-Nepal Remittance Facility for eligible transfers from India to Nepal. For most other international remittances, banks use separate foreign-remittance channels and applicable foreign-exchange rules.
4.Are NEFT and RTGS available on weekends and bank holidays?
Yes. Both NEFT and RTGS are available 24×7 throughout the year, including weekends and bank holidays, subject to any temporary system or bank-level maintenance windows.
By raising a CIBIL dispute, you can rectify errors in your credit report. An error-free report is crucial because your credit report defines your credit score, which reflects your creditworthiness. So, any inaccuracies can harm your CIBIL score.
Some of the errors that you may see include spelling mistakes or incorrect personal information, incorrect loan accounts or repayments not reflected. Thankfully, you can easily initiate the CIBIL dispute resolution process to rectify these inaccuracies.
Read on to learn how to raise a CIBIL dispute, check its status, the resolution process and more.
What is a CIBIL Dispute?
In case you notice any errors in your credit report, you can raise the issue with the bureau, which will then notify the concerned financial institution. When you carry out this process for any errors in your credit report from TransUnion CIBIL, it is known as a CIBIL dispute.
Types of CIBIL Disputes
You can raise a CIBIL dispute for different types of errors, depending on your account type. For a personal account, you can raise individual disputes for the following inaccuracies:
You can raise a dispute for corrections in your recorded personal details. These include name, date of birth, PAN card number, address, phone number, income, employment information and more.
You can also raise a dispute with CIBIL if you see any accounts or details that don’t belong to you.
Inaccurate Account Details
Sometimes, financial institutions may give incorrect or late updates on the repayment, which can lead to incorrect balances and overdue amounts. So, you can raise a dispute to request an update.
You can also raise a dispute if you see an enquiry for a credit that you didn’t apply for.
Ownership or Duplicate Account
If any loan or credit card account shown in your report does not belong to you, you can raise a dispute. Additionally, if any credit account reflects more than once, you can also raise a dispute for the same.
To raise a CIBIL dispute online, follow these steps:
Step 1: Go to the myCIBIL portal and login with your credentials
Step 2: Refresh your score if you haven’t already checked the latest one
Step 3: Select ‘Dispute Centre’ under the ‘Credit Reports’ tab
Step 4: Fill out the dispute form and choose the details you wish to dispute
Step 6: Click on ‘Submit’
Once you submit the form, you will get a dispute ID that you can use to track the status.
If you want to raise a dispute offline, write about the issue to TransUnion CIBIL and send the letter to the following address:
TransUnion CIBIL Limited, One World Centre, Tower 2A, 19th Floor, Senapati Bapat Marg, Elphinstone Road, Mumbai – 400 013
CIBIL Dispute Resolution Process
The CIBIL dispute resolution process begins as soon as you submit the dispute form. Once you raise the dispute, CIBIL initiates an investigation to identify the concerned financial institution. The bureau then relays the issue to the institution, which can accept or reject your dispute.
If accepted, the financial institution will make changes to remove the errors. In case of rejection, there will be no change or correction made. During the resolution process, the fields under which you raise the dispute will be marked as ‘under dispute’ until the issue is resolved.
How to Check CIBIL Dispute Status
The dispute resolution process can take up to 30 days, depending on several factors. While you will receive a CIBIL dispute status update every 7 days, you can also find out the status by logging into your CIBIL account.
To check your CIBIL dispute status through your account, log in to your myCIBIL portal and go to the ‘Dispute Status’ tab. Alternatively, you can call the consumer helpline number, +91 – 22 – 6140 4300, to get your CIBIL dispute status update.
Note that most financial institutions submit the required data to the bureau within 30-45 days after you’ve made the payment. As such, you must wait at least a month before checking your report. However, if there is no update on your account after 2 months, then you can raise a dispute.
Since the dispute resolution process can take up to 30 days, regularly checking your score and report is a great way to stay on top of your credit health. This allows you to stay updated on your eligibility and take swift action when needed.
However, if you need urgent funds and don’t have the ideal credit score, you can rely on Fibe’s Online Personal Loan. We have an alternate credit scoring system to determine your loan eligibility.
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FAQs on CIBIL Dispute
How does CIBIL dispute work?
When you find any error in your CIBIl report, you can raise a dispute by logging in to your myCIBIL account. Once you submit the dispute, the bureau will relay the same to the concerned financial institution, which will accept or reject your dispute. If accepted, the necessary changes will be made. Note that the entire process can take up to 30 days.
How can I check my CIBIL dispute resolution status?
If you have raised a dispute for a correction in your CIBIL report, then you can check the dispute status by logging into your myCIBIL account and going to the ‘Dispute Status’ tab. You can also call the consumer helpline at +91 – 22 – 6140 4300 to check the status.
Do credit disputes hurt your score?
No, simply submitting a CIBIL dispute does not impact your score. However, if there are any corrections related to your account details, you can see an improvement in your score.
By initiating Experian or CIBIL score checks, lenders assess your creditworthiness when you apply for loans. These scores reflect your credit behaviour and repayment history as recorded in your credit report collected by various credit information companies.
However, don’t be surprised if you are assigned a different score by each bureau. While Experian and Credit Information Bureau (India) Limited (CIBIL) consider similar factors, these companies have different scoring methods.
Knowing the difference between Experian and CIBIL scores can help you understand how these scoring methods affect your loan approval process.
Read on to know more.
Experian and CIBIL Score Meaning
Both CIBIL and Experian scores are three-digit numeric representations of your creditworthiness, which is based on your credit behaviour. Your CIBIL score is a part of the credit report generated by TransUnion, which is India’s first credit bureau regulated by the RBI.
Experian, too, has been authorised by the RBI under CICRA (Credit Information Companies (Regulation) Act of 2005) to manage credit risk and offer protection to lenders against identity theft.
When you apply for any loan or credit card, financial institutions execute an Experian or CIBIL score check to verify your eligibility and reliability as a borrower.
Experian vs CIBIL Score
Now that you understand what they are, here is a quick overview of the key points of difference between Experian and CIBIL scoring systems.
Particulars
CIBIL
Experian
Presence in India
Established in 2000
Established in 2009
Credit score range
300 to 900
300 to 900
Regulation
Regulated by RBI
Authorised by the RBI under Credit Information Companies (Regulation) Act (CICRA) 2005
Method of data collection
Banks and financial institutions
Wide range of sources, such as financial institutions, public records, rental payment history and many others
How to Check CIBIL and Experian Scores
Following these steps, you can get your free CIBIL score online:
Step 1: Go to the CIBIL website and click on ‘Get Free CIBIL Score & Report’
Step 2: Enter your personal details like name, contact and email address, identification details, etc.
Step 3: Click on ‘Accept and Continue’
Step 4: Upload chosen documents online and enter the OTP to verify your identity
Step 5: Review and download your CIBIL report
To know your Experian score, here’s how you can generate a free report:
Step 1: Visit the official Experian website
Step 2: Select ‘Free Credit Score’
Step 3: Enter your mobile number
Step 4: Verify your identity with a 6-digit OTP
Step 5: Fill in your details, like name, date of birth, email address, government-approved ID number, etc.
Both credit agencies rely on similar factors that have different weightage in determining your credit score.
Here are the factors that impact your CIBIL score:
Factor
Weightage
Payment History
30%
Credit Exposure
25%
Credit Type and Duration
25%
Other Factors
20%
Now, here are the factors that make up your Experian score:
Factor
Weightage
Payment History
35%
Credit Utilisation Ratio
30%
Length of Credit History
15%
Credit Mix
10%
New Credit Applications
10%
Regardless of whether you opt for an Experian or CIBIL score check to monitor your credit standing, review your scores regularly. Most bureaus and lenders allow you to generate at least one free credit report annually. Any checks post this require you to
pay a nominal fee for one-time reports or an annual subscription service.
By having a good credit score, you can easily apply for a number of financial products, such as a personal loan or a credit card, when needed. However, if you have a low credit score or you are new to credit, don’t fret.
At Fibe, we don’t rely on traditional credit scores to approve your application. Instead, our alternative scoring system allows us to review your loan eligibility on other inclusive factors. Just meet our simple terms to get the Fibe Personal Loan of up to ₹5 lakhs at affordable interest rates.
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FAQs on CIBIL VS. Experian Scores
Which is better: A CIBIL score or an Experian score?
While both credit bureaus are equally reliable, CIBIL is more widely used in India. Most financial institutions have established ties with CIBIL, as it is the first established credit bureau with over two decades of operations.
Can Experian be trusted?
Yes, Experian is a trustworthy credit agency that many financial institutions around the world rely on.
Do Experian and CIBIL use the same credit scoring model?
While both agencies use similar factors to calculate your credit scores, Experian and CIBIL calculate scores using different scoring models.
