What is CIBIL Report

When it comes to issuing loans or credit cards to new applicants, banks consider two important factors. The income of the individual, and more importantly, the credit score of the individual. This simple three-digit number helps banks and all financial institutions understand the repayment history, the previous credits availed and the overall credit behaviour of the individual.

Details about CIBIL and Credit Information Report

Each time you avail any credit facility, the information is sent to an authorised credit bureau which records all the details to create a credit information report. In India, the most widely accepted credit bureau is CIBIL or Credit Information Bureau of India Limited, which is currently known as TransUnion CIBIL.

This organisation was formed in the year 2000 as per the regulations of the RBI Siddiqui Committee. The goal was to provide tools and valuable credit information to both lenders and consumers to understand the credit history. It would not only help lenders mitigate any risks but would also provide an easier means of availing credit to consumers.

Today, the CIBIL maintains records of over 550 million consumers, which include both individuals and businesses. Consumer information is collected from across the globe and is maintained under the most secure conditions.

With the information that is collected from various sources including banks, non-banking financial companies (NBFCs), and other financial institutions, the CIBIL creates a detailed credit information report that can be accessed by potential lenders as well as borrowers.

The credit information report not only contains to credit score and history, but also several details about the individual. Here is a list of the common details about the individual or the business that you will find on a credit information report:

  • Credit score: This is the three-digit number that is based on the individual's credit behaviour and history. You will see a number which ranges from 300-900. If this number is closer to 900, it means that the individual is more credible for any lender to extend loans and credit facilities to. In case the number is lower, then the chances of approval on any application made by the individual are also lower. It is possible to change the CIBIL score by making amends in your credit behaviour or by ensuring that your credit report is updated.
  • Personal information: This includes the name, gender, date of birth, and also identification type such as your Passport number, PAN Card, Driver's License, Voter's ID, etc.
  • Contact information: Under this section, the address of the individual appears first. There are also details about whether it is a house address, an office address, a permanent address, or a temporary address. Next, you have details such as the updated mobile number, landline number, and the email ID of the individual. This information is updated as received by the lending organisation where the individual has applied for credit from.
  • Employment information: The information in this section is as per the details provided by the user at the time of making a loan application. It contains employer details and also details of the individual's income and credit account.
  • Enquiry information: This provides details on the enquiries that you have made for a loan or credit card based on the number of applications submitted. It has detailed records of the type of credit facility, the name of the organisation and also the credit limit or loan quantum that you have applied for.
  • Account information: This is the most important information that is present on the credit information report. This is where all the details of the credit facilities, including loans and credit cards, are provided. You have information such as the account number, whether it is held singly or jointly, the current balance available, and also a monthly repayment record. You can get information for up to 36 months with the repayment of the loan.
  • Red box: If there is a red box under any field that is present in the account details section, it means that the information is under dispute. This could be due to information that has not been updated or even information that has been wrongly recorded. Once the dispute is completely settled, this red box will be removed from the section.

Why is CIBIL Important?

CIBIL is extremely valuable to consumers and lenders alike. The credit score represents the individual's credit behaviour and financial history.

Here are some factors that make CIBIL extremely important for anyone who is looking at credit facilities:

  • It helps lenders understand the credibility of the individual: With any credit card or loan that is provided to an individual or a business, the credit score is the first factor that any bank of financial institution considers. This gives them information about the existing credit availed by the individual and, consequently, the repayment capacity of the individual. It also informs the bank about the repayment history of the individual, which reveals how credible he or she is. The bank is able to confirm the employment details provided by the individual as well.
  • You are able to check your eligibility for any loan: One thing to keep in mind when you are applying for a loan or a credit card is that any rejection can affect your CIBIL score negatively. So, it is best that you only make an application for one where you are most likely to get an approval. This can be done by checking your credit score which is usually the basic criteria for most loans.
  • It helps you take necessary measures to improve your credit score: It is vital to understand what factors are causing a low credit score. It could be excessive credit, irregular repayments, or even multiple loan applications. In some cases, it could also be due to the wrong information or any issue in updating your information. You can make necessary changes and even dispute any wrong information to make sure that your credit score improves and helps you get better credit facilities in the future.

Factors Affecting CIBIL Score

There are certain factors that tend to affect your CIBIL score negatively.

The four most vital factors leading to a negative CIBIL score are as follows:

  • Delaying payments towards credit availed: Whenever you apply for a loan, the most important thing to keep in mind is the terms of repayment. In case of a loan, the repayment is divided into equated monthly instalments (EMI) that you need to pay on a particular date each month. For credit cards, you will be given a due date when you have to make a repayment towards the usage. If you fail to make the payment towards the EMI or the credit card outstanding on the date mentioned, it negatively affects your credit score as this information is sent by the lender to the credit bureau.
  • Too many applications: Frequent applications for loans or credit cards indicate a financial distress. It also increases the chances of these applications being rejected, which has an adverse effect on the credit score. Whenever you make an application for a new loan or credit facility, it is a good idea to ensure that you are eligible for the same. Lenders list out eligibility criteria in detail. It is recommended that you understand them thoroughly. You also have the option of financial tools like eligibility calculators that help you understand which loan is suitable for you and which loan you should avoid applying for.
  • Making use of credit to the maximum: If you are maxing out your credit card each month, it means that you do not have adequate funds to meet your financial requirements. As a result, your ability to make repayments towards any new credit may also be affected. It is best that you only use a portion of the credit extended to you, even when it comes to loans. This has two benefits. Your repayment burden is reduced considerably. Second, your credit score is maintained. Most financial advisors recommend that you cap your credit card spending to 30% and also limit the usage of the cash withdrawal facility provided.
  • The type of credit facility availed: There are two categories of credit facilities that are provided to borrowers. One is called a secured credit where you provide collateral or security against it. The second is called an unsecured credit that does not require you to provide any collateral against it. Having only unsecured credits or a maximum of unsecured credits affects your credit score negatively.

Tips to Improve CIBIL Score

If you have a low CIBIL score, it means that your chances of getting loans and credit cards also diminish. The good news is that you have the option of improving it by changing your credit behaviour.

Here are some simple tips that you can follow in order to improve your credit score:

  • Make all your repayments on time: As mentioned before, be it a loan or a credit card, there is a set due date to make your repayments towards them. It is a good idea to make the payment on the due date in order to increase your credit score. It is even better if you can make the repayments before this date. When it comes to credit cards, try to clear the total outstanding amount instead of only making minimum repayments towards them. This also reduces the repayment burden towards the amount that is carried forward to the next month as you save on the interest payable.
  • Consolidate your loans: The best way to increase your credit score is to reduce the credit that you currently have outstanding. Consolidate your loans by making regular payments towards them. You can also reduce the repayment tenure of your loan if you have the option of making larger EMI repayments each month. Foreclosing a loan may affect your credit score negatively. Therefore, it is a good idea to make prepayments if you have access to more funds instead of foreclosing them. The best way to consolidate your debts is to clear any outstanding that you have towards your credit card. This helps you achieve a significant increase in your credit score.
  • Avoid cash withdrawals on credit cards: One facility that is extended to customers by most credit cards is the option of making cash withdrawals. However, it is best that you limit your cash withdrawals to emergencies. Making frequent withdrawals using a credit card means that you are currently having a limited inflow of cash. It also indicates financial distress which makes lenders wary of providing you with any credit facilities.
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  • Reduce debt utilisation: Even if you have a high credit limit available, reduce the usage of credit cards to 30% of the limit. This is a great way to make repayments easier and also increase your credit score. With personal loans and other types of loans as well, use only what you need from the amount sanctioned.
  • Get a good mix of loans: Availing credit facilities may become necessary from time to time. It is a good practice to avail secured and unsecured loans and credits in an equal proportion.
  • Check your credit report regularly: Make sure that you check your credit report on a regular basis. The information provided on the credit report is based on the updated information provided by the lenders. In some cases, this information is not made available to the credit bureau. Then, even if you have made timely repayments or have closed any loan, it may not reflect in the report. Resolving these issues is the best way to get a higher credit score.
  • Do not apply for multiple loans: Make sure that you apply for a loan only when you need one. Even when you do apply for a loan, look for ones that you are able to repay easily and ones that you are eligible for. Finding the right loan reduces the repayment burden. It also reduces the chances of rejection on your application. Any rejected loan or credit card application, as mentioned above, affects the score in a negative manner. So, make sure that you limit the number of applications in a short span of time.

Terms Used in CIBIL Report

There are a few technical terms that you will notice on your CIBIL report. Understanding what these terms or acronyms mean is vital to understanding your credit report. It also helps you check if any dispute needs to be raised with respect to the information provided in the report.

Term Used Explanation

Asset Classification

  • This refers to the nature of the account, as mentioned below:
  • STD or standard where transactions are regular. If the account has any overdue above 90 days, it becomes an NPA or Non-Performing Asset.
  • SMA or Special Mention Account that is gradually moving towards becoming sub-standard.
  • SUB or Sub-Standard where the account has remained an NPA for 12 months.
  • DBT or doubtful where the account has been substandard for 12 months or more.
  • Loss where a noticeable loss has been seen in the account.

Actual Payment Amount

This is if the payment made towards the loan is different from the EMI payable.

Amount Overdue

This is the total outstanding towards all the lenders.

Cash Limit

This is restricted to credit cards and denotes the maximum cash that you can withdraw.

Control Number

This is an identification number for your credit information report, which you can use when you raise a dispute.

Collateral

This applies to any loan where you have provided a security in order to avail the loan.

Current Balance

This denotes the amount that you owe to any credit facility.

Credit Limit

This refers to your credit card and denotes the maximum limit provided to you by the financial institution.

DPD

This shows how many days a repayment has been delayed by.

EMI Amount

This is the actual EMI payable towards the loan

Enquiry

This shows any previous loan or credit card application or enquiry made by the individual.

High Credit

This is the highest billing amount for a credit card.

Ownership

There are four kinds of accounts that are denoted in this section, including single or joint users, authorised user, and guarantor.

Repayment Tenure

This denotes the tenure available to make repayments towards your loan.

Sanctioned Amount

The amount that has been disbursed to the borrower by the lender.

Settlement Amount

In case of any dispute between the borrower and the lender, they decide upon a final settlement amount. This also signifies any changes made in the loan agreement in terms of the rate of interest or the repayment tenure.

Suit Filed/ Wilful Default

This field is included when there is any dispute between the lender and the borrower and the former has filed a suit against the latter.

Written Off Amount (Total)

This denotes the principal as well as the interest portion of the amount written off when it comes to a loan.

Written Off Principal

This denotes the principal amount that the lender has written off.

Written Off and Settled Status

This denotes all the changes made in the loan, be it a change in the loan terms, written off amount, settlement amount, etc.

FAQs - What is CIBIL Report

Why does my credit score read "NA"?

NA or NH denotes that the individual does not have any credit history to report. It can indicate the following things:

  • He or she has not availed any loan or credit facility in the past
  • The individual has not availed any credit facility for several years at a stretch
  • The individual has not used any credit card or has only been using an add-on credit card so far

How can I get a loan even if the credit score is low?

Even with a low credit score or zero credit score, consumers have the option of getting a loan or credit card. This can be done by availing a secured loan facility. It means that you will have to provide necessary security or collateral against the credit facility that you have opted for.

What is the minimum credit score required in order to get a credit card or loan?

With most banks and financial institutions, a credit score of 700/750 (depends on the type of credit and lender) or above is considered suitable for extending any credit facilities to the individual.

Why is my account information not updated?

CIBIL relies on the information provided by the bank or financial institution to provide updated information about a specific account. This may take up to 30 days to be updated. In some cases, the information is not provided to CIBIL. Consumers have the option of disputing any such information to make the necessary changes.

How can I dispute wrong account information?

Any wrong information on the credit report can have a negative impact on your credit score. If you wish to dispute any information provided on the CIBIL report, you can follow these steps:

  • Log on the official CIBIL website
  • Choose the Dispute Resolution option on the menu
  • Fill a dispute form and submit it along with the details required

Once a dispute has been raised, the account will be marked with a red box in subsequent credit reports. The dispute is then taken up with the lender who may choose to either accept the dispute or reject it.

What are the options to access my credit report?

You can access your credit report directly on the CIBIL website. Every year, each individual is given one free credit report. If you want to access your credit report multiple times, you will have to avail a CIBIL membership. This membership fee is based on the number of times you want to access your report. You have the option of seeking unlimited access as well. The second option is to get your credit report through any financial institution that you are currently associated with.

How will an add-on card benefit my credit report?

Having an add-on card does not indicate any credit activity because it is the primary user who is responsible for all payments that have to be made. However, in case there is any default in the payment, the add-on card user as well as the primary user will have a negative impact on the credit score.

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