CIBIL which means Credit Information Bureau India Ltd is the highest agency in India which is known for its services like credit CIBIL reports and ratings to individuals and businesses. It is the only one among 1000 companies in the world which has an ISO 27001 rating, that is the highest security standard in the world.
The work of CIBIL is to release credit reports which are called Credit Information Report (CIR) to individuals on the basis of their past credit history, which the agency receives from leading financial institutions in India. CRISIL is one of two credit rating agencies currently operational in India, the other being Experian Credit Information Company of India Pvt Ltd.
What is a CIBIL Credit Report?
The Credit Information Bureau (India) Limited (CIBIL) TransUnion Score is a three digit number which is a summary of the individual ’s history of credit. The information provided in the customer’s CIR decided this score generated based on it. This report reveals information about the customer’s history of credit payment across various loans and also institutions over a period of time. However, this report will not contain information regarding the customer’s loans, fixed deposits or other investments.
Components of a CIBIL Credit Report
A CIR contains information in detail on the credit that customers have availed such as auto loan, home loan, credit card, overdraft facilities and personal loans. A CIBIL credit report will contain information regarding the customer’s CIBIL TransUnion score, their personal details, employment details, contact details, and account information along with inquiry details. An in-depth analysis of the report is provided below.
- An illustration is given in the first section of the CIBIL score. The score range is between 300 to 900 which is generated based on the information provided in the accounts section of the report. A visual representation of the score is provided where the scores are better when closer to the green. CIBIL scores between 700 to 900 are termed as favorable. This is an indication that the customer will have a higher chance of repaying the loan and hence will inspire more confidence in loan providers or credit card companies in the future if the score is closer to 90. The scores are represented visually in a blue bubble. Another information mentioned is ‘figures’ which indicate the number of customers in the form of the percentage who were given loans in the previous year and who fall in a particular section of scores at the time of their loan application.
- Personal Information section contains information about the details of the customer like customer’s name, date of birth and sex as reported to the members of CIBIL. Other details that are required are customer’s PAN number, passport, voter ID and so on.
- Under the personal information section, ‘(e)’ symbol next to a particular detail shows that the value was given by the lender when the customer had applied for a credit facility.
- Contact Information comprises information about the customer’s address, mobile numbers, telephone, and email address. This category also mentions whether the addresses were residential, permanent or official. Up to 4 email addresses and other addresses will be provided.
- Employment Information contains the information provided by a lender for a specific credit account regarding the customer’s income at the time of opening the facility for credit and also their occupation.
- Account Information is one of the most important sections of a CIBIL Credit report. This section provides information about the customer’s credit cards and loans including the name of their lenders, type of facilities that have been availed such as auto loan, home loan, credit card and so on.
- This section may or may not contain a red band at the side. If it does, it indicates that the particular section is disputed and the band is usually removed once it has been settled.
- Inquiry Information – Under this section, customers can find out details regarding vendors who have enquired into their credit application. Details include the vendor’s name, type of loan, amount of loan, application date and so on.
- The last section is Consumer Dispute Remarks which can be added by customers from a list that has already been defined. These remarks will be available on the report for a year and every time the report is accessed by any particular credit institution, this will be displayed.
The above sections are generally the ones present in a CIBIL Credit report. Each component is important and explains the credit situation of the customer in simple terms.
Importance of CIBIL Credit reports
A CIBIL credit report is a report which has a high value because this report helps the banks and financial institutions to analyze a person’s creditworthiness which is based on the regularity of repayment and borrowing history. The main importance of CIBIL credit reports are:
- An accurate report mentioning all the previous and current credit history.
- The basis of releasing loans to a borrower is formed by CIBIL credit reports.
- Keeps away from all debt traps.
- It helps to maintain the financial discipline through his report.
- Helps in negotiating interest rates when better scores are there on the credit report.