To evaluate an individual's credit worthiness, potential lenders view CIBIL score as the most important factor before granting a loan. If your CIBIL score is low then your loan application may straightaway be rejected by the lenders. Borrowers need to keep their CIBIL score in line if they want to avail credit. Awareness about CIBIL still needs to reach masses as some careless mistakes can ruin your credit score.
What is CIBIL?
CIBIL is an abbreviation used for Credit Information Bureau (India) Limited, CIBIL is India's foremost credit information company. It maintains records of all credit-related transactions of individuals and companies including loans and credit cards. These records are submitted to CIBIL by registered member banks and other financial institutions on a periodic (generally monthly) basis. Based on analysis of this data, CIBIL issues a Credit Information Report (CIR) and a credit score.
CIBIL is a depository of credit information. It does not make any lending decisions. It provides data to banks and other lenders who use it as a quick reference and efficient resource to filter out loan applications.
What is a credit report?
A credit report is an all-inclusive document which depicts an individual's borrowing history and repayment track record. It provides potential lenders with details of an individual's credit worth based on his/her historical and current credit transactions.
A credit report is issued by four RBI authorized credit depositories in India which are CIBIL, Equifax, High Mark and Experian. Credit information companies such as CIBIL collects and maintains records of all credit-related transactions of individuals as reported by their lenders such as banks, NBFC's or credit card companies. This information could include details of all loans and credit card repayments including any late or missed payments, details of queries made by lenders on loan or credit card applications made in the past, all current loans and credit cards, total credit limit, among other credit-related information.
A credit report is a single unified document that timelines your credit history across different lenders over a significant period of time. Your credit report would include the following details:
What is a good CIBIL score?
A good CIBIL score is 750 or above. A credit score is a three digit number between 300 - 900. The below image depicts the chances of getting a loan sanctioned with different CIBIL scores possibilities.
How can you check your CIBIL score?
Under RBI guidelines credit bureaus including CIBIL are mandated to provide free credit score once a year to all individuals. Those who are interested to know their credit scores from the bureau can visit the bureau website and apply for a credit report online or the same can be applied through post.
Factors affecting CIBIL score:
Common mistakes that affect your CIBIL score: