CREDIT INFORMATION BUREAU

CREDIT INFORMATION BUREAU (INDIA) LIMITED – (CIBIL)

Introduction:

                    In modern area there are many money lenders and huge population so no one will know exact details of any person. One can understand their earning capacity by seeing his income documents (balance sheet, profit and loss account), his industry margin, and business set up etc. But his repayment track history cannot be known. So now the CIBIL comes in to picture.

CIBIL Stands – Credit Information Bureau (India) Limited Provides,

Ø  Repayment track of previous loans.

Ø  Name of the applicant, Address, KYC details(PAN, Passport etc

Ø  Credit Score and all credit cards

Ø  Running name in applicant’s name, any enquiry made by person for any loan etc.(Including guarantee given by person for any loan)

CIBIL collects and maintain monthly reports (Credit Information Report-CIR) from bank and financial institutions, detailing individual’s loan and credit card payment history. CIBIL was created to play a critical role India’s financial system, helping loan providers manage their business.

CREDIT SCORE:

A Credit Score is a three digit numeric summary of your credit history. The value ranges between 300-900.It is derived by using details found in Accounts and Enquiries section on your credit Information Report(CIR).CIBIL score is one of the first checks that  a lender does when they are evaluating your loan application. It’s important to know that nearly 90% of the loans are granted for Individuals with score greater than 750.

“The higher your CIBIL Score, the higher are the chances of your loan application getting approved”.

To Build High Credit Score:

Ø  Payment history: Making late payments or defaulting your EMIs or dues shows you are having trouble to pay your existing credit obligations and will negatively affect your score.

Ø  Utilization of Credit Limit: While increased spending on your credit card will not necessarily affect your score in a negative manner, an increase in the current balance of your credit card indicates an increased repayment burden and may negatively affect your score.

Ø  Higher percentage of credit cards or personal loans (also known as unsecured loan

    Having a balanced mix between the secured loans (such as Auto, Home loan) and unsecured loan (such as Personal loan, Credit Card) is likely to have a more positive effect on your score.

Ø  Many new accounts opened recently

   If you have recently been sanctioned multiple loans and credit cards, then lenders will view your application with caution because this behavior indicates your debt burden has increased increase, which will negatively impact your score.

Ø  Enquiries for Loan with any Bank and Financial Institution

   If you have enquired for loans with many banks and financial institution it shows that you are not getting loan anywhere and desperate to get loan. So this also reduces CIBIL Score.

CIR – Credit Information Report

Ø  The Credit Information Report (CIR) and CIBIL Trans Union Score are used in the loan approval process.

Ø  Once the loan provider has decided which set of loan applicants to evaluate, it analyzes the CIR/Score in order to determine the applicant’s eligibility.

Ø  Eligibility basically means the applicants ability to take additional debt and repay additional outflows given their current commitments.

Ø  The CIR and Credit Score help loan providers identify consumers who are likely to be able to pay back their loans.                                             

Ø  A Credit Information Report (CIR) contains detailed information on the credit you have availed, such as home loans, credit cards, personal loans, automobile loans, overdraft facilities.

        Disputes in CIBIL and its resolutions

     After downloading CIBIL report from or rejection of loan if someone finds that there is some problem with his report then he can put any loan. This can be done online also. After furnishing all the details by consumer CIBIL will verify the details with corresponding bank or financial institution transactions. If they find that there is some error in reporting they will rectify the error. Normally CIBIL captures data of minimum 7 yrs. normally dispute resolution is being done in 30 days