The Credit Information Bureau (India) Ltd, or CIBIL, is a store-house of records of an individual‘s payment history on loans and credit cards. CIBIL acquired the details from banks and other lenders on a monthly basis.
The data provided by lenders is used by CIBIL to create Credit Information Reports (CIR) and credit scores, which, in turn, are provided to lenders in order to help evaluate and approve future loan applications. The credit score helps loan providers quickly determine, who they would like to evaluate further to provide credit.
As such, your CIBIL report and CIBIL Transunion Score provides a testimony of your financial discipline to banks and financial institutions for approval of your loan or credit card application.
A healthy CIBIL report and a high CIBIL TransUnion Score indicates that you are managing your loans and credit relationships well and are financially savvy.
Harshala Chandorkar, Chief Operating Officer, CIBIL, enumerates 5 reasons on why you should access your CIBIL report and CIBIL TransUnion score before you approach a lender for a loan.
Get Loan Ready
Along with your income-to-debt ratio, your credit history as reflected in your CIBIL report is a vital parameter for the approval of your loan application. It is important to do your homework and assess your credit eligibility before applying for a loan. Along with calculating your income-to-debt ratio you should also be aware of your credit history and credit score. Therefore, before applying for a loan or credit card you must access your CIBIL Report and CIBIL TransUnion Score and understand its components so that you do not face any unpleasant surprises in the form of loan rejection because of low CIBIL TransUnion Score. Based on data analysis we have observed that most banks and credit institutions are lending to people with a CIBIL TransUnion Score of 750 and above. The score ranges from 300-900.
Monitor your Loan and Credit Card accounts
Your CIBIL report provides a comprehensive view of all your loan and credit cards. It is a useful tool to monitor performance on all your loans – be it loans that you have availed, guaranteed or co-applied. It also provides you a snapshot of your credit cards- the ones you own and the ones you may have provided to your spouse or children as add-on credit card.
Ensure your CIBIL Report reflects accurate information
By accessing your CIBIL report you can ensure that the information reflected there is accurate and correctly reported by your banks or credit institution. If you find any discrepancies in the information on your report you can always get it corrected by approaching CIBIL through its online dispute resolution forum. CIBIL can also help you resolve any discrepancies or disputes on your credit report through the online dispute resolution process on our website.
Credit Health Check Up
Just like your regular health check you must also run a financial health check-up to be in control of your financial stability. Reviewing your CIBIL report will provide you insights into your financial health with reference to your credit exposure – how much debt you hold, your repayment history on loan EMIs and credit card bills, how many times have you applied for a loan or credit card? Do you have detrimental flags like “Settled”, “Written-Off” or “Suit Filed” against any of your loan accounts or credit cards?. This credit health checkup will help you take corrective and preventive measures in time for maintaining financial hygiene and a healthy credit report.
Negotiate for better terms on your loan
Banks and lenders now increasingly rely on CIBIL report and CIBIL TransUnion Score to decide if the loan should be approved. Therefore, a consumer with a good credit score is most desired by lenders. The consumer can use this powerful reputational collateral to his or her advantage. Accessing your CIBIL report before applying for the loan may give you better negotiating power with the lending institution for availing the loan at better terms and conditions, if you have a high credit score and a healthy CIBIL report.