EXECUTIVE SUMMARY: The Credit Information Bureau (India) Limited (CIBIL) maintains your credit report and credit score, which are used by lenders when you approach them for a loan or credit card. It is very important to interpret the credit report correctly, in order to improve your credit score. The credit report has 6 elements, such as the CIBIL Score, personal information, contact information, employment information, account information and enquiry information. You can access your credit report by contacting CIBIL, in order to understand where you stand.
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The Credit Information Bureau (India) Limited (CIBIL) is India’s leading credit information company and maintains information pertaining to consumers’ credit history. Suppose you wish to borrow a car loan and approach a bank closest to your residence for this purpose. The bank will first have to assess your credit worthiness before granting you the loan. It goes without saying that the bank will examine your income proofs and other documents. But how does the bank know if you are servicing your liabilities with other banks promptly? How does it determine if you have borrowed according to your repayment capacity? In short, how does the bank know about your credit behaviour in the past?
This is where banks and other financial institutions make use of CIBIL. When you approach a financial institution for a credit requirement (be it a loan or a credit card), that institution analyses your credit history by accessing your CIBIL score and CIBIL Credit Information Report (CIR). These two form an integral part of your credit worthiness. Banks also submit your information to CIBIL when you apply for a new loan or on a monthly basis when you service the loan you have taken. This information is updated in your CIR.
This is where banks and other financial institutions make use of CIBIL. When you approach a financial institution for a credit requirement (be it a loan or a credit card), that institution analyses your credit history by accessing your CIBIL score and CIBIL Credit Information Report (CIR). These two form an integral part of your credit worthiness. Banks also submit your information to CIBIL when you apply for a new loan or on a monthly basis when you service the loan you have taken. This information is updated in your CIR.
So what's your CIBIL score?
Let’s look at various elements of the CIBIL Credit Information Report. Your credit report is divided into six sections:
1. CIBIL TransUnion Score: This shows the current credit score. The credit score can range between 300 and 900. This is determined based on the credit and enquiry information which is present in the credit report. Lenders generally view a score more than 700 as favourable. Higher the credit score, the better are your chances in availing the loan. You can improve your score by displaying prudent credit behaviour at all times. Avoiding late payments and defaults, reducing unsecured loans in your balance sheet, reducing how much you use your credit card limits and being careful in the number of loan applications you make are some ways of protecting and improving your credit score.
2. Personal Information: This section contains your personal information such as your name, gender, date of birth and identification details such as PAN card, voter’s id, driving license or passport details. The information is sourced from lenders where you have loans or to which you have made applications.
3. Contact Information: This part contains your present and past addresses, telephone numbers, mobile numbers and email address. The most recent information is shown at the top.
4. Employment Information: This shows occupation details, including income details and if you are a salaried individual. This information is taken from your loan application and may not be up-to-date.
5. Account Information: This is the most important part of your credit report and is directly responsible for the credit score. This section has details of your loans and credit cards, along with the monthly repayments you make, upto a period of 36 months. The financial institution, type of credit facility availed, the loan ownership type and details of the loan are shown. The amount of loan sanctioned, the current balance outstanding, the amount overdue, the number of days this is overdue and the loan status are some details which this section displays. The information is sourced from the various financial institutions in the country. Banks usually view this section with great detail, as this shows if the loan applicant is a credit worthy borrower or if he is a defaulter and if so, the instances of default.
6. Enquiry Information: This shows the list of lenders who have viewed your credit report, when you had approached them for a loan. It has details of the name of the lender, the date on which the enquiry was made by the lender, the type of loan for which the enquiry was made and the amount of such a loan. As and when you make new enquiries, this information is added to your credit report.
You can click here to view the video which explains the various parts of your credit report. It is seen that the CIBIL CIR is very detailed and has a huge impact on your borrowing conditions. A high credit score and a clean credit history can help you get easier access to credit and at better terms. You can access your CIR and CIBIL Score by submitting an online application form on the CIBIL website and by paying Rs. 470. Alternately, this can also be done in the offline mode. Access your credit report to understand how good or bad your credit history is in the eyes of lenders, and take active steps to improve your score.
The author can be reached at smitha@gettingyourich.com
1. CIBIL TransUnion Score: This shows the current credit score. The credit score can range between 300 and 900. This is determined based on the credit and enquiry information which is present in the credit report. Lenders generally view a score more than 700 as favourable. Higher the credit score, the better are your chances in availing the loan. You can improve your score by displaying prudent credit behaviour at all times. Avoiding late payments and defaults, reducing unsecured loans in your balance sheet, reducing how much you use your credit card limits and being careful in the number of loan applications you make are some ways of protecting and improving your credit score.
2. Personal Information: This section contains your personal information such as your name, gender, date of birth and identification details such as PAN card, voter’s id, driving license or passport details. The information is sourced from lenders where you have loans or to which you have made applications.
3. Contact Information: This part contains your present and past addresses, telephone numbers, mobile numbers and email address. The most recent information is shown at the top.
4. Employment Information: This shows occupation details, including income details and if you are a salaried individual. This information is taken from your loan application and may not be up-to-date.
5. Account Information: This is the most important part of your credit report and is directly responsible for the credit score. This section has details of your loans and credit cards, along with the monthly repayments you make, upto a period of 36 months. The financial institution, type of credit facility availed, the loan ownership type and details of the loan are shown. The amount of loan sanctioned, the current balance outstanding, the amount overdue, the number of days this is overdue and the loan status are some details which this section displays. The information is sourced from the various financial institutions in the country. Banks usually view this section with great detail, as this shows if the loan applicant is a credit worthy borrower or if he is a defaulter and if so, the instances of default.
6. Enquiry Information: This shows the list of lenders who have viewed your credit report, when you had approached them for a loan. It has details of the name of the lender, the date on which the enquiry was made by the lender, the type of loan for which the enquiry was made and the amount of such a loan. As and when you make new enquiries, this information is added to your credit report.
You can click here to view the video which explains the various parts of your credit report. It is seen that the CIBIL CIR is very detailed and has a huge impact on your borrowing conditions. A high credit score and a clean credit history can help you get easier access to credit and at better terms. You can access your CIR and CIBIL Score by submitting an online application form on the CIBIL website and by paying Rs. 470. Alternately, this can also be done in the offline mode. Access your credit report to understand how good or bad your credit history is in the eyes of lenders, and take active steps to improve your score.
The author can be reached at smitha@gettingyourich.com
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