Imagine you are planning to invest in a company’s shares. The first and foremost task is to analyze the company’s past performance and return patterns. Similarly, when banks lend money, they need to thoroughly check the creditworthiness of the borrower to ensure timely repayment with interest. They do this by referring to your past credit records, the CIBIL report, and your credit score, also known as the CIBIL score. What exactly is this, and how is it generated? Let’s delve into the details.

What Is A CIBIL Report?

TransUnion CIBIL Limited, previously known as Credit Information Bureau (India) Limited, is India’s oldest credit information bureau. It compiles credit reports, known as Credit Information Reports (CIR), which provide a comprehensive overview of an individual’s credit history based on information from member banks and financial institutions. The CIBIL credit report acts like a financial report card, detailing all financial activities and generating a 3-digit CIBIL credit score reflecting the individual’s creditworthiness. A higher CIBIL credit score signifies responsible borrowing habits and enhances financial credibility. A score above 700 is generally deemed excellent, although some banks may have higher standards while others may be more flexible.

Components Considered In A CIBIL Report

The CIBIL report is an exhaustive record of your credit journey so far. The components considered while preparing your report include:

1. Your Repayment History: Your credit history is the most crucial factor in your CIBIL credit report. A poor credit history labels you as a risky borrower to banks and lenders. Lenders report all your credit activities to CIBIL, impacting your credit report and score. Timely payments lead to an excellent CIBIL credit report, while delayed payments reflect as red flags in the report.
2. Multiple Credits: Multiple loans like home loans, personal loans, car loans, and credit cards can make lenders cautious. It is advisable to close one loan before applying for another to avoid negative impacts on your CIBIL credit score. Pay off existing loans to improve your credit report and avoid appearing credit-hungry to lenders.
3. Credit Utilization Ratio: Lenders avoid extending credit to borrowers with a credit utilization ratio exceeding 35%. This ratio is crucial in assessing your repayment capacity based on income. Overspending on credit cards or any other forms of credit negatively impacts your CIBIL credit report and lowers your credit score.

How To Generate Your CIBIL Report?

1. Visit the CIBIL website: To check your CIBIL Score, visit the official TransUnion CIBIL website, India’s leading credit bureau. Look for the ‘Get Your Free CIBIL Score’ button, as they often provide one free report annually.
2. Provide Necessary Details: Fill in the required information, including your full name, date of birth, address, and identification documents. Ensure accuracy to avoid discrepancies with official records.
3. Authenticate Your Identity: To safeguard your data, the website may require an authentication process. You might need to answer a few questions about your credit history, so keep financial details accessible.
4. CIBIL Report Download: Upon successful verification, you’ll receive your CIBIL report via email.

In line with the Reserve Bank of India’s mandate in 2017, every credit agency must offer one free credit report annually to consumers with a credit history. After getting your first free credit report, you can take up a subscription option of one month (at Rs.550), six months (at Rs.800), or a year (at Rs.1200).

Reading Your CIBIL Report

To analyze a CIBIL report carefully, let’s comprehend the different elements of the report:

1. Credit Score: The credit score, found at the beginning of your CIBIL Report, is a three-digit numeric representation of your credit history based on the Credit Information Report filed by lenders. It does not include details about savings, investments, or fixed deposits.
2. NA or NH Display: If your credit score is shown as NA or NH while reading your CIBIL report, it could mean you have not yet established a credit history (e.g., for individuals who haven’t started earning) or haven’t had any credit activity in recent years, or have no credit cards or loans.
3. Personal Information: This section includes your name, date of birth, gender, and identification numbers like PAN, passport number, and voter’s number, uploaded by lenders. Carefully review this information for accuracy.
4. Contact Information: This section displays your addresses, phone numbers, and email address, uploaded by lenders. Verify the details and report any inaccuracies.
5. Employment Information: This part covers your occupation, monthly and annual income details as reported by lenders during loan application.
6. Account Information: This section provides details of your credit facilities, such as the name of the lending institutions, type of credit facilities, account numbers, date opened, date of last payment, loan amount, ownership details, current balance, and month-on-month payment records. Days Past Due (DPD) – the number of days an account’s payment is due, will also be mentioned.
7. Enquiry Information: This part reports the number of inquiries made by lenders in response to your credit/loan applications. Details include the lender’s name, type and size of the loan applied for, and application date.
8. Red Box: A red box above the ‘account details’ table indicates any disputes related to account information and the dispute date. The red box is an alert message and will be closed once the dispute is resolved.

Correction In CIBIL Report

To avoid a drop in your credit score and improve loan or credit card approval chances, regularly check your CIBIL credit report for errors. If you find discrepancies, follow these steps:

1. Fill out the CIBIL online dispute form on its official website.
2. Submit the form, and the disputed field will be marked “Under Dispute.”
3. CIBIL will email the lending institution and notify you of the dispute’s status.
4. If accepted, they will correct your CIBIL credit report.

The resolution time for disputes is around 30 days.

Conclusion:

Understanding your CIBIL report makes accessing and assessing your credit score and information easier. Spot errors and maintain a good credit score to fuel your financial requirements with personal loans. So if you are well prepared and ready to apply for a personal loan, get in touch with CreditCares to get your loan quickly and safely.

FAQs

1. How many months to generate a CIBIL score? CIBIL credit scores are calculated based on the information in your credit report. You will need at least three to six months of credit activity recorded in that report before a credit score can be created. Simply put, it takes at least six months to generate a CIBIL score.
2. How to get a CIBIL report free of cost? If you are registered with CIBIL, you can access your CIBIL report for free by logging in with your credentials. Many financial institutions also offer a free report on their website or app. You will be required to provide some basic information, followed by OTP verification.
3. How to download the CIBIL report PDF for free? To download your CIBIL report for free, create an account at https://www.cibil.com/. After logging in, you can check your score and download the report at no extra cost.
4. How can I clear my CIBIL report? To clear up your CIBIL credit report or remove the ‘Written Off’ status, you must pay all outstanding amounts against your name. Once completed, discuss with your lender to obtain a ‘No Due Certificate.’ Upon submission of this certificate, your CIBIL report will be cleared, allowing you to start afresh.