What is CIBIL?
CIBIL stands for Credit Information Bureau (India) Limited. It is the first credit information company in India, established in August 2000. The company collects and maintains credit records of individuals as well as commercial entities. This includes borrowing and payments related to loans and credit cards.
CIBIL obtains this information with the help of its associate partners which include members of banks and credit institutions. Information is provided to CIBIL on a monthly basis based on which CIBIL prepares a Credit Information Report (CIR) and CIBIL credit score of an individual. This report is then provided to credit institutions, when requested, to help them evaluate and approve loan/credit applications.
CIBIL plays a major role in India’s financial system by helping banking institutions better manage their business and be helping customers secure credit on fair terms. CIBIL is also referred to as the Credit Bureau. It is licensed by the RBI and governed by the Credit Information Companies Regulation Act, 2005.
What is a CIBIL Credit Score?
A CIBIL credit score is a three digit numeric summary of your entire credit history. It is prepared based on the information provided in your Credit Information Report. The credit score normally ranges between 300 to 900.
Why is knowing CIBIL Credit score important?
CIBIL plays a major role in loan application and approval processes. Without a satisfactory CIBIL score, you may not be eligible for many loans.
After you fill and submit your loan application form, a bank will first check your credit score and credit report. If you have a bad credit history and a low credit score, the bank may outrightly reject your loan application. Only if your credit score is good will a bank consider your loan application and pass it through for approval.
CIBIL credit scores are the deciding factor for many banks when it comes to considering your application. The higher the score, the higher the chance your loan application will be reviewed and approved. However, the decision to approve your loan application is completely dependent on the bank; CIBIL as an institution does not play any role here.
How to find your CIBIL Credit Score
Find your CIBIL credit score within a few minutes in three simple steps!
To get your CIBIL Credit Report, you will need to fill the ‘CIBIL online credit score request form’
Step 1: select from the following subscription plans:
Bi-Annual Subscription - 2 Score Reports (Rs.800)
Quarterly Subscription - 4 Score Reports (Rs.1200)
Step 2: Enter your PAN, email address, date of birth and select your gender
Step 3: Input the displayed characters in the given box
Step 4: Tick on the box before ‘I acknowledge and accept the Terms and Conditions applicable and available on the site.’
Step 5: Click on ‘Proceed to Payment
Once the payment is made, you will be redirected to an authentication page. Here, you will need to answer 5 questions related to your credit history. Answering at least 3 correctly will authenticate your identity. You will receive the credit report within 24 hours in your email address.
If authentication fails, you can send a hard copy of the application duly filled out along with your address proof and the id generated by CIBIL. You will then receive the credit report by post at the address provided by you.
Note: Be advised to obtain your credit reports and credit score personally rather than getting it done through a bank. Enquiries from bankers and other financiers will negatively impact your credit score.
What can affect your CIBIL Credit score?
Mentioned below are a number of factors that may affect your CIBIL score.
Payment history: Your payment history plays a major role in developing a good CIBIL record. Making late payments on credit cards or delaying/defaulting on your EMIs regularly can negatively affect your credit score, indicating that you are not serious about or capable of clearing your existing debts.
Increased credit limit: Increasing the current balance of your credit card may negatively affect your credit score since it is considered to enhance your repayment burden. However, increased spending on your credit card does not affect your credit score as long as you’re credit utilisation is in proportion to your credit limit.
Unsecured loans: A high percentage of unsecured loans such as personal loans and credit cards may affect your credit score. A balanced combination of secured and unsecured loans adds positively to your credit score.
Multiple loans & Credit Cards: If you have multiple loans, credits cards and new accounts, this may affect your credit score, and banks may review your loan application more carefully.
How to improve your CIBIL Credit score?
Building your CIBIL credit score is not really hard, but it does require systematic planning and execution. Some of the best ways to improve your CIBIL credit score are mentioned below.
- Know where you stand – The first step towards building your score is to know where you stand. Having an idea about your current position and preparing a target can help you work towards it. Checking this score can also help you determine if it is factual and identify any errors, if any. Immediate correction of errors could help in a quick increase of score.
- Never delay payments – Procrastination is one of the harshest truths of our current world, with most of us falling prey to it. Delaying your bill payments, be it credit card or loan EMIs could see your score dipping, which makes timely payments a key role in maintaining a decent score. While a bank may be OK with ignore the first delayed payment, repeated delays could bring unwanted attention from their part.
- Mix your credit – Just like variety adds spice to your life, variety in terms of credit can do a world of good to your credit score. A mix of secured and unsecured loans can reflect favourably on the score, with a varied portfolio preferred by most lending organisations. A skewed portfolio in favour of a particular type of loan (unsecured loan) could see your score taking a negative route.
- Don’t max out your credit – In times where we want to enjoy things to the maximum, there is a high possibility for us to go overboard when it comes to our credit limit. Staying within the limit is bound to build your score, while exceeding it could come at a price. This shows lending agencies that you are not carried away and are a responsible individual who knows his/her limit.
- Limit your cards/loans – A quick look at our wallets will show that a number of us have more cards than we need. While a problem of plenty is good in a few cases, owning too many credit cards can have its own drawbacks. Not only does it complicate credit repayment, but it also pushes us to spend more than we need, leading to debt in our life.
Credit cards and other similar tools were designed to be an added benefit in our lives, but misusing any provision can throw things out of gear. Keeping a few simple pointers in your mind could ensure that you stay on the right financial track.
FAQs Regarding Checking CIBIL Credit Score
Q. Does being a guarantor for someone affect CIBIL credit scores?
Yes, if you agree to be the guarantor for someone and they fail to pay the loan back in time, you become liable for it. This means that you might have to pay it back which will put an undue strain on your finances and may even cause you to default on it.
Q. I paid my credit card off but the report shows outstanding balance. Why is that?
CIBIL credit reports reflect only data that has been received by them from your creditors. If they have not been updated about your recent activity, it won’t show on your report.
Q. I have a dispute regarding my CIBIL credit report. What do I do?
If you have a dispute regarding your CIBIL credit report, you need to notify CIBIL about it in writing. Once they receive the grievance they will contact the creditors to confirm and redress the problem.Q. I have informed CIBIL about inaccuracies in my credit report. Will they correct it?
No, CIBIL does not make any changes to the data they have on you. What they will do is to approach your creditors to get the latest information. If the creditors provide them with said information, they will update it else, they will take no action.Q. What happens if there is a problem with the payment gateway and I am charged twice?
If you are charged twice while making payments using cards or net banking, then you should write to CIBIL. They will confirm the error and refund any extra amount that you may have been charged.Q. What do I have to keep in mind if I am paying via DD?
The main thing to keep in mind is that there should be no mistakes on the demand draft and that it should be payable in Mumbai. If there are mistakes on the DD then the DD may be rejected and your application not processes till they receive the relevant payment.Q. Can I pay by cheque?
No. You cannot pay by cheque. You can only pay via DD or online banking.Q. When should the payment reach CIBIL?
The payment for your application must reach CIBIL within 30 days of applying for the report or you’ll have to apply again.
News About CIBIL Credit Score
Insights on Building a Good Credit Score
Healthy Credit Score is an essential aspect that can spike up your chances to get a loan approved. In short, credit score is a statistical number that shows your credit worthiness that is used by the lenders to know your likelihood of paying the borrowed amount. Based on the credit score, a loan or credit card application get rejected or approved. First and foremost, checking the credit score regularly is highly important. TransUnion, Experian and Equifax are some of the leading credit bureaus which offer free credit score as well as paid credit score.
You can anytime increase your credit score by following a disciplined payment schedule. Clear all your pending debts, pay your monthly bills on time, maintain low credit utilization ratio, minimize credit enquiry and mixed credits are some of the factors that can enhance your credit score dramatically. Credit score normally ranges from 300-850. It is better to have score higher than 750 as it increases the chances of a loan getting approved in low interest rate. You should never apply for a loan, in case your credit score is less than 550 as it is highly probable that your loan will get rejected. Credit score ranging from 550-750 is good but it also shows defaults, which can help you to get a loan at higher interest rates. So, plan your expenses smartly.
07th December 2017
Deeper Insights into Credit Rating
The global credit ratings and research organization, popular as Moody, has recently upgraded the sovereign rating from Baa3 to Baa2. Considering this, many assumed that their Credit Score went up. However, credit score and credit report are two popular terms that are often inter-linked. Briefly, credit rating is meant for financial instruments and companies, and on the other hand, credit score is for individuals who borrow from financial companies.
Governed by securities and exchange board of India (SEBI), the credit agencies rate companies and financial instruments including bonds, fixed deposits, and debt fund and many more. Lower credit ratings imply defaults, while higher credit rating means theses instruments are in compliance. Credit rating is basically, an alphanumerical combination, that varies from AAA to C and D. Credit ratings are subjected to change over a period of time, depending on the reassessment of the company. In contrary, credit score is a three digit statistical number that is for individuals. CIBIL Sore ranges from 300-850.
30th November 2017
Boost your Credit Score
Credit score is a 3-digit number that represents individual’s creditworthiness. Higher the credit score, more likely are the chances of a loan getting approved. In contrary, a lower credit score declines a credit card or a loan application. In general, a credit score ranges from 350-800. Although, everyone wants to have a high credit score, often, unknowingly individuals end up repeating the same set of mistakes that plummets the credit score.
To improve the credit score, an individual should clear all the credit card balance, keep the old debt in the credit report and maintain a low credit utilization ratio. The total amount of credit present on the credit card versus how much is actually used shows individual’s dependency on the credit money and that is credit utilization ratio. Apart from these, everyone should strictly follow the due dates to pay all the bills on time, and keep checking the credit report regularly. CIBIL offers free credit score once in 6 months. All these clubbed together can bounce your credit score that helps to build a good credit report.
28th November 2017
CIBIL to assist borrowers with loan offers
TransUnion CIBIL is going to assist borrowers to procure the best loan option based on their credit history and credit scores. This company has started CIBIL Marketplace which formally assists individuals secure loans. CIBIL will collect fee from banks and customers need not pay any fee or charges. As of now, CIBIL has partnered with 13 banks to provide retail loans such as loan against property, personal loans, home loans, credit cards and business loans.
When a customer logs onto CIBIL’s website to check the credit score and can also apply for a loan. The customer will have to also submit his KYC and income details.
31st March 2017
CIBIL Partners With IBM For Data Security Solutions
The credit information company CIBIL has entered into an agreement with IBM to procure security solutions for its data. CIBIL holds sensitive information related to the financial dealings of people which could make them the target for cyber-attacks. This is exactly what IBM will prevent from happening. IBM is going to provide CIBIL with real time assessment of possible suspicious activity along with log monitoring through IBM X Force Intelligence. A Security Operations Center (SOC) has also been set up to deal with phishing attacks and the deal will also include regular daily scans of the CIBIL website to ensure security.
23rd June 2016
Credit scores crucial to loan approvals
With a number of banks e.g. HDFC Bank, Canara Bank and Vijaya Bank initiating base rate cuts, loans are set to become cheaper. Coming ahead of the wedding and festival seasons, banks are expected to lower loan rates to keep up with competition. This bodes well for loan seekers who can take advantage of lower EMIs.
Most loan seekers would do well to purchase and review their CIBIL reports before applying for a loan. CIBIL scores and income levels are two key factors that determine a borrower’s loan eligibility.
Ideally, loan seekers should obtain their CIBIL scores and reports prior to applying for loans. Such ‘soft inquiries’ do not adversely impact CIBIL scores. However, banks making inquiries, termed ‘hard inquiries’, do affect a borrower’s CIBIL score.
With more investor awareness about CIBIL and its ratings, loan seekers stand a better chance of availing loans.
8th September 2015