The Credit Information Bureau (India) Limited or CIBIL is one of the 6 registered Credit Bureaus in India that collects and stores your credit information. A customer’s information concerning loans and credits is received by CIBIL from the authorized financial institutions including banks.
CIBIL and other credit bureaus are responsible for the collection and maintenance of an individual’s credit information. However, they do not generate or conserve any defaulter’s lists whatsoever.
Each customer’s information is analyzed in order to reach an appropriate CIBIL score and a descriptive credit report. The scores can then be shared with the institutions upon their request in order to grant loans to the customers. The importance lies in the fact that this information can later be used to improve the CIBIL score and maintain a healthy record of credit.
For new customers, it’s necessary to understand that CIBIL score is different from the CIBIL report. Here’s how.
Understanding CIBIL Score
Your creditworthiness is signified in the form of a credit score or a CIBIL score. It’s a numeric value, ranging from 300 to 900. Financial institutions like banks which are authorized by CIBIL, provide the credit bureau with customer’s loan and credit-related information. The information includes your credit card bills’ repayment history, credit channels you own, loans you have availed, and information pertaining to your credit utilization. CIBIL then uses analytical methods for all of these data points in order to deduce the relevant credit score of that customer. A CIBIL Score is based on 24 months of your credit-related information.
A Credit Score that is above 750 is considered to be a healthy CIBIL score in general. However, a lesser score does not imply that you are not eligible for loans. Higher the CIBIL score of a customer, the lower will be the risk of them to become a defaulter. Therefore, a good CIBIL score makes it easier for customers to get their loan approved by the bank or other financial institutions. It also becomes easier for the individual to secure personal loan at lower rates of interest. A CIBIL score, thus, is a numerical value summed up after processing all of the necessary credit information of an entity. You mustcheck CIBIL score frequently.
Finserv MARKETS provides you with a Financial Health Check Report or a CIBIL Report that is inclusive of your CIBIL score free of cost!
Having understood what CIBIL score is and all that it entails, let’s now understand a CIBIL Report and how it is different from a CIBIL score.
Understanding CIBIL Report
A Credit Information Report, or simply a credit report, is a comprehensive documentation of an entity’s relevant information – personal and financial. It is commonly known as a CIBIL report. Apart from personal details including name, address, gender, PAN number and contact information, a CIBIL report includes a customer’s employment information and income details, their loan account details, the credit card related particulars, and enquiry data. Broadly speaking, a customer’s credit information is collected and made trackable through the CIBIL report. A CIBIL report collects a customer’s credit history over a period of 36 months.
How is this information assembled? A customer’s credit data is received from banking institutions and other lending entities. A detailed report based on the same is then generated. The loan account details contain types of loans (secured or unsecured) availed by the customer and any current loans with their repayment schedule. Defaults and settlement details, if applicable, are mentioned too. Credit card information is held for all cards owned by the customer, their bill payment defaults are tracked, if any, and cancellation of any credit cards in the past is recorded.
A CIBIL report is also responsible for tracking the number of times a customer has made CIBIL score enquiries through the lender(s). And most importantly, a CIBIL report provides a customer with the CIBIL score given to them basis all of the above information. On Finserv MARKETS, check your CIBIL score alongside various other parameters in the form of a free Financial Health Check Report. The free Financial Health Check Report is personalised, simplified and holds valuable insights into your financial stability. Using the Financial Health Check Report, you can make informed decisions about your financial future.
Thus, while a CIBIL Score is a numerical value given to a customer after assessing their loan credit-based information, a CIBIL report is an all-inclusive description of the customer’s credit behaviour on the basis of pertinent personal and financial information.
Improving CIBIL score and maintaining healthy CIBIL report
Every year, customers must check CIBIL score and the CIBIL report at least once. You can do so on the CIBIL website or with the Financial Health Check Report online. Once you understand where you stand with respect to your credit, you can begin working on your financial health.