What is CIBIL report?
CIBIL stands for Credit Information Bureau India Ltd., which serves as the main storehouse of credit information in the country. Over 500 banks and financial institutions report the actions of their customers to CIBIL. The bureau provides credit reports called CIR (Credit Information Report) to people and companies. This report contains information related to customer’s credit payment history across different loans over a period of time. However, the report does not include information about fixed deposits, loans, or other investments done by the customer.
The agency closely monitors credit taking and payment capacity of the customers. Every detail including applying for a credit card, non payment of an EMI on a car loan or even an enquiry about a home loan gets reported to CIBIL. Not only bad activities, but good activities like making credit card payments on time, clearing EMIs punctually are reported too. In this way, CIBIL maintains a history for each customer and on the basis of this report; banks may approve or even reject a loan application.
CIBIL report is an extremely useful concept. For instance, if a person clears his credit dues in time then he should get preference for a loan, enjoy faster processing of the application and receive better interest rates. On the other hand a person with a bad report gets loan at higher rate of interest (looking at his dicey record) and banks may even deny his loan request altogether.
Elements of a CIBIL Report
CIR contains in depth information on the credit availed by customers like home loan, auto loan, credit card, and personal loans etc. The report includes customer’s CIBIL score, their personal information, employment details, contact info, account details and enquiry details. A thorough analysis of the CIBIL report is given below:
- CIBIL score: The score can be anything between 300 and 900 depending upon the information given in the accounts and enquiry section of the report. A score between 700 and 900 is seen as positive. A score closer to 900 indicates high probability of customer repaying the loan and thus inspires more assurance in loan or credit card providing companies.
- Account Details: It forms one of the key sections of the CIBIL report that includes information about customer’s loans and credit cards together with the name of the lending institutions, type of services availed for instance, home loan, auto loan, and credit card etc. Besides this, the details of all accounts held by the customer like whether the account is joint or single, the date of opening of the account, date of the last payment, loan amount, the current balance, any overdue amount and a monthly record until 3 years of the payments is also mentioned.
- Personal Info: It contains details like customer’s name, D.O.B, gender, PAN number, passport and voter ID details as informed to CIBIL members.
- Enquiry details– This section contains details of the companies who made enquiries about the credit application put in by the customer. It includes the company’s name, loan amount, kind of loan, date of application, etc.
- Contact Info: It contains information about customer’s address (residential/ official/permanent), contact numbers (mobile/ landline) and email address.
- Employment Details: It includes information given by a creditor regarding customer’s income and occupation at time of applying for the credit.
These sections are usually there in a CIBIL report. Each section is significant and clearly describes the credit worthiness of a customer.
Significance of CIBIL report
CIBIL report is an extremely significant credit report that aids financial institutions and banks evaluate a customer’s credit capacity on the basis of their borrowing history and repayment discipline. The CIBIL reports are significant because:
- It is an incorporated report that contains your past and present credit history.
- It forms the foundation of approving loan applications of a borrower.
- It helps in steering away of debt traps.
- It is a comprehensive report that helps you foster a better financial control.
- Higher score on the report can help negotiate better interest rates.
It is possible to build our own credit report provided we act responsibly and use credit effectively. Building a first-class credit history with CIBIL will help you sooner or later. One has to be extremely careful about credit card and loan payments as even one default can affect your credit report.