What is CIBIL?The Credit Information Bureau India Ltd. is a credit information company that maintains the record of loans and credit card payments that are collected from all the banking and financial institutions. Every credit history of borrowers (commercial and consumers) is available under the files of CIBIL.It releases a CIR (Credit Information Report) which is a kind of credit score used in the loan evaluation process by the lendersWho commands CIBIL?CIBIL is not a single body but its equity shares are majorly held by many financial giants like SBI, HDFC, Dun & Bradstreet Information Services and Trans Union International Inc. But now its shares are distributed to various institutions such that to expand its coverage.Generally all the banks, financial corporations, non-banking financial institutions and credit card companies are its members.What is CIBIL Credit Information Report?A Credit Information Report (CIR) is the record of a borrower’s credit history that is made by collecting the transaction details of the individual. CIBIL obtains data easily as every other corporation is its member and hence furnish its data so that the organization can prepare the report. It is helpful for the lenders in their decision of loan approval. The accuracy of report cannot be questioned and now it is used by almost every lending body. Before every deal, the lenders check the CIBIL database for the credit history of the consumer and then only take any further step.What is a Credit Score?Derived from the credit information report, the credit score is the numeric data of your credit history. It’s a three digit data that ranges from 300-900 and displays the probability of default. The more the score is, greater are the chances of acquiring loan.How can I read my credit report?The credit report is divided into 6 sections:
- Personal information
It contains your personal details such as name, gender, DOB, PAN and other ID proof details
- Contact information
It contains address, phone numbers, e-mail ID and other contact related details.
- CIBIL Transunion score
The CIBIL quotes this as the credit worthiness of the individual. The score defines the nature of individual in terms of finance.
- Employment information
This reflects the nature of occupation and income details of the borrower.
- Account information
This information is an important one as it reveals the information related to the credit facilities already availed to the borrower (home, auto, personal etc). With that the account numbers, loan details, balance of payments is also mentioned. The payment behavior is one such info that is crucial for the lending organization which can be extracted from this report.
- Enquiry information
This section tells about the enquiries filed by lending institutions for the credit report of the consumer. If more number of enquiries is present then a negative impression may build because it is a clear sign that the borrower is hungry for credit.How CIBIL report is important in loan applications?While evaluating the loan application, the lender will check the credit score at first in your report. 90 percent of the times, those who score more than 700 are qualified for the loan.However the eligibility for loan is not entirely based on this score. The income and current EMI’s also count to make an individual eligible but credit score plays a pivotal role in the process of evaluation.How CIBIL helps if the loan is rejected?If in an unfortunate case the loan is rejected by the lending organization then by contacting CIBIL, the credit score can be settled and improved by proper analysis of the credit history.However the only thing you can do is to maintain a good credit history. Only this will help in getting you loan.