Credit Information Bureau India Ltd. is apex agency in India that brings facility of calculating credit score to make applying for loan and credit card easy not only for personal use but for corporate use too. CIBIL is among top 1000 organization in the world that holds the ISO 27001, which is highest in the world in terms of quality standards.
A credit report is a precise document that contains thorough details of borrowing history and repayment record of an individual or corporate. The banks and financial institutions can get a detailed picture of credit history and current credit behavior to determine whether an applicant is accountable to get a loan approval or not. Credit Information Bureau India Limited (CIBIL) is the country first credit information bureau that records and maintains all credit-related details of an individual or corporate. It allows finance lenders to conveniently access the CIBIL report of a new applicant so that they can make quick and transparent lending decisions. Credit Information Bureau collects individuals credit details including number of loans currently running, total credit limit, number of hard inquiries, any late or missed payment, and other such details.
A credit report is a distinct unified document covering credit history from different lenders over a significant period of time. Generally, the report covers the information like:
o Personal information including name, gender, age, residential address, and occupation
o Employment details and annual income
o Earlier and current loan details along with the repayment record
o Number of hard enquiries made by potential debt providers on receiving loan applications
o Any default or settled loans
o Credit Utilization Ratio, that is, available credit card limit and the amount spent monthly
o Any credit card payment defaults
o Overall credit score ranging from 300 to 900
Report issued by CIBIL is known as credit information report (CIR) that brings complete information about entire transaction history of company or individual. Apart from CIBIL there are other reputed agency Experian Credit Information Company of India Pvt Ltd. that avails top class services to users.
Credit report contains information about all repayment done by customer over certain period of time but it never contains the information about loans, fixed deposits and other services. Credit Information Bureau (India) Limited (CIBIL) TransUnion Score is combination of three digits that point out the transaction credit of customer.
Credit information report avails the information about the credit earned by the customer from credit card, home loan, personal loan, overdraft and auto loan. It will also contain the record of employment details, personal details, bank account related information, contact information too. Some main component are specified below
a. In first segment user will get information about their CIBIL score in range of 300-900, on the basis of information provided by you to CIBIL.
b. Personal information section contains the complete information about customer including name, address, date of birth, voter ID, PAN card and other information.
c. In sub section under personal information, records regarding lending amount and date of application will be mentioned.
d. Next section is contact section that avails the information about candidate email address, mobile number, telephone etc. Here, it will also be specified that specified address is official or permanent residential address.
e. Account section specifies the details provided by customer to respective organization while applying for loan. Here, information regarding your credit and loans will be available as per CIBIL policy.
f. Employment section specifies information about the candidate income resources and other transaction records along with profession of the candidate.
g. Enquiry section contains the information provided by the vendor while gathering information regarding policy and other terms and conditions.
h. Consumer dispute remark is final segment or component of this section that will avail information about the report accessed by the customer every year with date and other information i.e. credit related information.
Each component is vital and important component of CIBIL report and must be present in report to keep report valuable and authentic.
As we know that this is highly reputed and valuable report that CIBIL issue to avails individual credit value to help banks or other financial organizations to make their task easy and authentic. Some of them are
a. Helps in staying clear of debt traps.
b. Better score on the credit report provides leverage when negotiating interest rates.
c. A unified report with all your previous and current credit history.
d. CIBIL credit reports form the basis of releasing loans to a customer.
e. An exhaustive report to help you nurture better financial discipline.
CIBIL issue credit information report of individual on the basis of their credit worth. Statically specified numbers are CIR of individual. If are applying or planning to apply for loan or credit card. CIR is mandatory for all the process. Prime factors of CIR are specified below
a. New credit facility for customers.
b. Customer payment history specifies the details about the transaction details about the past three months along with Days Past Dues (DPD) that specify about delay in EMI repayment.
c. Enquiry section refers to all inquires made by you to get loan, credit card and it will also refer to the mistakes made by you during the process. It will also specify details to calculate the details regarding number of attempts made by you.
d. Current outstanding balance refers to details about reaming EMI payment and credits.
Company credit report contains information about the any organization on the basis of information provided by the company to any bank or reputed financial organization. CCR report does not offer any rating because CIBIL is not authorized to do so, only reputed organization can give rating to companies.
CCR is used by organization to get approval and help in loan approval process. Healthy CCR report is beneficial in approval of loan and helps you to grow your business easily. One of the main differences between company credit report and company rating is that bank avails information regarding all specific transactions whereas authorize agency calculate the quality on basis of specified criteria and after that issue them rating as per their performance.
If you want to receive your CIBIL report, you need to fill all the required information as per need in application form.
1. First of all choose and subscribe your plan, whether choose Bi annual plan that will give you two reports and charges for this offer is RS 800 or choose the plan quarterly subscription and get four reports and fess for this offers is Rs. 1200.
2. Enter your details like date of birth, PAN card number, chose your gender and specify your email address.
3. Enter the captcha from box to complete the authentication process.
4. Now check on check box to go for further processing.
5. Now click on proceed to payment option.
After successful payment, user will be redirected to security authentication section and you have to answer three out of five. Question will be based on previous transaction records of users, so answer carefully to avoid any complication. If anything goes wrong then as a proof you have to send hard copy of your valid documents to get your CIBIL report.
It is possible to get CIBIL report without subscribing any plan, to do so follow the steps given below
a. Go to Url https://www.cibil.com/freecreditscore/
b. Now, enter your personal information including name, date of birth, PAN card and Identity proof document.
c. Now, enter details about your address.
d. Enter the security code in the box.
e. Checks on the check box go ahead.
f. Now, click on SUBMIT BUTTON
Then CIBIL will send user id and password in your email id. Now by using this user id and password login into your account and click on view full report and get complete report. To get extra flexibility use need to buy plans availed by CIBIL.
A credit score is considered to be poor if it is less than 650. This score is issued by the credit information bureau based on the loan history and other influencing factors. The score gives a concluded idea of an applicants loan accountability. A score less than 650 often disqualify a candidate from getting a loan approval as it implies that a person is irresponsible with the financial behavior. On the other hand, a score higher than 750 is considered as an excellent rating as it indicate a responsible financial behavior of an applicant.
A CIBIL report is generated based on the credit details of an individual. With this reliable credit information system, every single loan detail is recorded by the CIB, which allows the financial institutions to access the details and check whether the applicant is liable to get a loan approval or not.
Therefore, it is advisable to manage a score higher than 750, in order, to easily get the loan approval in future. Score less than 750 is considered as below average and throws a negative impact over the money lenders.
This is the most common reason for low score because people generally fail to make timely payments not realizing that this habit will affect their score and they possibly will have difficulty in getting loan approval in future due to poor score. The higher the number of delayed payments, poorer will be the score.
Financial analysts always suggest to never missing the payment even due to an unforeseen emergency. This is because if a person misses any loan repayment then this will be counted in the credit history and will result in poor score.
Yes, even after the system being accurate and reliable, in rare cases, there are chances of administrative errors, that is, wrong information or detail mentioned and managed on the credit report. Sometimes, this can also be a case of fraudulent activity. Even after no fault on a person, these errors invite poor score that makes it difficult to get the loan approval.
Credit repair is a method of re-creating the credit health and report so that a person can become accountable to get the loans in future easily. Simultaneously, with the need of the credit information system, people also need credit repair services for improving the score and fix the damage done unknowingly to the CIBIL report. It has been observed that people do not take the credit scores seriously and even after knowing the negative sides for having poor score, they follow the unfavorable factors.
In general, if you have a score less than 750, then it is better to seek for an experts help to boost the score so that your application never gets disapproved due to the low score. If you have a poor credit score, then it is not like that you can never get a loan approval in future, because there are certain ways to improve the CIBIL score that can boost the score within 6 to 8 months. Check out the ways to boost the score:
o Obtain the CIBIL report immediately
If your score is dragging down, it is better to obtain the report and understand the factors that are unnecessarily impacting the report negatively. As mentioned above, the poor score can also be result of administrative errors, so it is better to read and understand what actually is dragging down the score. If any error is found, request the administrative to rectify the error immediately, this will instantly improve the credit report.
o Ensure to make timely payments
This is the most crucial factor that influences the credit report, thus, even if you miss one or two payments, make sure to instantly repay the outstanding balance in full, this will throw a positive impact and will verify that you are a responsible borrower. As a matter of fact, timely payment makes up to 30% of the entire credit report.
o Ensure you spend only 50% of your credit card limit
Undoubtedly, credit cards have eased the lives, but, if you have a poor credit report, then make sure that the spent does not exceed 50% of the total credit card limit. Suppose, you have a credit card limit of worth Rs.1 lakh monthly, then spend only Rs.50000 or less in a month. Consistently making only 50% use of the card limit will leave a positive impact in terms of the spending discipline and thus, definitely boost the score for good.
o Avoid requesting for multiple loans or credit cards parallely
Do not apply for the loan or credit cards within short period of time as this will leave an impression that you are craving for the loan because probably you are running out of the money. This behavior makes the lenders nervous and concerned as whether you will be able to repay the amount or not and thus, they ultimately reject the request. Every debt request disapproval results in decreased score.
Poor credit history
Any bank or financial institutions always check for the CIBIL report of an applicant before approving the loan request, so if you have a poor credit history then there are high chances of getting the application rejected. Therefore, check the report before requesting a loan because each disapproval will drag down the score. What factors can form poor rating:
a. Bad credit history:The credit rating is calculated on the past financial responsiveness and behavior. Based on this, a three-digit number ranging from 300 to 900 is generated, in order, to indicate the financial behavior of an individual or corporate. Higher the score, greater the chances of loan request approval.
b. Financial delinquency : Lenders not only consider the financial delinquency, but, also check for the outstanding period of time.
c. Too many requests : Even if you are high in need of the financial support, do not apply for too many loans and credit cards simultaneously because it will make the lenders doubt your ability to repay the debt on time.
Fail to meet age criteria
There are certain criteria for approving the loan request and the minimum age to apply for the loan is 18 years. However, in some cases, the application is rejected if an applicant is more than 18 years old but less than 21 years because they do not have any stable or valid income.
Unstable job history could possible leave in trouble while requesting a loan. An applicant has to be stable with the current job for at least 6 months covering the overall work experience of 1 to 2 years. An applicant needs to show a valid stability of job as well as for the residential address.
Loan request approval broadly depends on the annual income of a person, thus, an applicant has to meet the minimum income criterion to get the approval. However, the range of minimum income can vary from lender to lender. Even if the joint loan is requested, both applicants should meet the minimum income criterion to get the approval.
Being a guarantor to a defaulter
If an applicant has been a guarantor to a person who is announced as defaulter by the authorized lenders, then there are high chances that the applicant would not get a loan approval. Therefore, to prevent such situation to occur, it is advised to become a loan guarantor with utmost care and make sure that the partner will repay the installments on time.
High percentage of unsecured loans
Avoid taking unnecessary personal loans and credit card expenditure because high percentage of unsecured loans is another factor for rejecting the request. Many financial institutions consider it as a sign of unbalanced financial management and ultimately may influence poor CIBIL report. On the other hand, if you have more secured loans and made timely payments, then this will surely boost the credit rating.
Negative field investigation or call verification
Banks are strict with their loan approval process and initiate the physical investigation to verify the residential address and workplace before passing the loan. They confirm whether the documents submitted are factual or not. That is the reason for which it is advised to submit the valid documents required for the purpose of residential and other proof (age, identity, and income) because if any discrepancy is found regarding the documents during the investigation and verification, then there are high chances of getting the application rejected.
Here are few steps should be taken into consideration if the debt request is being rejected. By following these steps, one can be assured of getting the approval next time.
Understand the reason for loan rejection: The first and foremost step to be taken for finding the solution is to know and understand the exact reason. Do not assume things; ask the lender to give a valid reason for disapproving the request because as per the RBI, no bank and financial institution can reject a loan application without any valid reason. Get the real reason from the lending authorities and try to fix the same for future loan approvals.
o Analyze the CIBIL report : Request the credit report from the credit information bureau authority and analyze the report to know factors due to which you are falling short to get an approval.
o Rectify the errors : Analyze the report thoroughly and rectify the error (if any). Even minor errors can influence the request rejection of a loan or credit card. Therefore, do not take even minor errors for granted.
o Look for alternative option : Do not get disappointed and seek for an expert advice to know the alternative options available. You can once again get in touch with the lender asking for their second opinion to get the approval next time. Otherwise, you can go for not so leading financial institutions to get the financial help.