November 11, 2024 · 10 mins read
Santosh Kumar
When people approach banks or other lenders to get a loan or even a credit card, the lenders first acquire what is known as their CIBIL report. They do this to assess the creditworthiness of the applicants. In other words, the CIBIL report is used by lenders to see how the applicant has handled their available credit in the past and if they can be trusted with more credit or not. You can think of it as a report card that reflects how well or poorly you have performed in a given period. A good CIBIL report is the gateway to eligibility for getting additional credit and enjoying better terms and conditions. Your CIBIL report is, therefore, extremely important, and you must have detailed information about it.
We will take you through all the components that make up a CIBIL report and the factors that decide whether a person's CIBIL report is good or bad.
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Let us begin with a deeper understanding of what a CIBIL report is. A CIBIL report, also commonly called a Credit Information Report (CIR) or a credit report, is a detailed account of an individual's past credit use. This much can be inferred from the name itself. In India the credit report is created by what are known as credit bureaus or Credit Information Companies (CICs). Four credit bureaus exist - TransUnion CIBIL, Equifax, Experian and CRIF Highmark. The CIBIL report, as the name suggests, is generated and maintained by Credit Information Bureau Limited. All these credit bureaus have a set of different parameters according to which each person's credit behaviour and history is evaluated, and that further impacts their credit borrowing capabilities. Let us look at the components of a CIBIL report:
Naturally, an individual's CIBIL report contains some essential personal information about them. These essential identity markers include their full name, date of birth, gender, etc. It will also have details such as your PAN card number, Passport, driver's Licence, etc.
A CIBIL report will always contain the contact information of a person. This consists of their phone number, address, and email ID. The address will further be specified as residential, permanent or official.
The most important component of a person's CIBIL report is their credit or CIBIL scores. CIBIL score is often confused with CIBIL report, but you must keep in mind that the score is merely a component of the report, albeit an important one. This score is mentioned in the top-right corner of your report. The credit score falls between 300 and 900, reflecting how good or bad the entire report and your credit history are. If you do not have a credit history, then your CIBIL score will be reflected as Not Applicable (NA) or NH. This happens with those people who do not have a considerable credit history such as students with no income or people who are just recently employed.
The CIBIL score is considered the most crucial aspect of the CIBIL report because lenders use it to decide whether a lender should be approved for additional credit. A low CIBIL score is considered poor and prevents people from getting loans, credit cards, etc. A score higher than 690 is considered to be good enough for approving credit applications.
A CIBIL report has all your employment details. It will mention what your occupation is. Along with that, your income will also be mentioned.
Read More:: Is 776 a Good CIBIL Score?
Since a CIBIL report is concerned with a person's use of available credit, it naturally contains all information about their loans, credit cards, EMIs, etc. It offers a comprehensive account of all these things. For instance, in the case of a loan, your account number, type of account, the lender, the loan amount, last payment, overdue payment, current balance, etc. will all be mentioned. The same goes for all your other forms of credit as well.
A CIBIL report is required to monitor one's financial health. Regularly checking the report helps one stay on track and take the required action to maintain or improve it. A regular check on the CIBIL report is also a great way of detecting any fraudulent activities at an early stage. For instance, any unauthorised loans or credit cards taken in your name will show up on the report, and you will be able to take immediate action.
A CIBIL report is also necessary when applying for any form of credit. It will help you understand your eligibility before you make any applications. A good grasp of your CIIBIL report and credit history also lets you know if you have the power to negotiate better interest rates and other credit conditions.
When we say that a CIBIL report is a detailed account of one's use of credit in the past, we are referring to a variety of factors and parameters that are employed to judge this usage, and that eventually decide how good or bad their credit report will be. Let us look at all these factors one by one:
Your payment history is perhaps one of the biggest factors that has an impact on your CIBIL report. The payment history refers to your repayment of loan amounts and payment of credit card and EMI bills. You must be punctual with repaying your dues because any default or late payments affect your CIBIL report and your credit score very poorly. You want to show lenders that you are responsible and can be trusted with more money. This will not be possible if your credit report shows impending payments or written-off accounts.
Credit Utilisation Ratio might sound complex, but it refers to how much of your available credit you use. You should keep your credit utilisation ratio as low as possible. The logic is that lenders must not be viewed as highly dependent on credit. So when you have a large credit limit but a low utilisation, it works in your favour.
This one is straightforward. It is counted as a hard enquiry whenever you apply for credit, be it loans, credit cards, etc. Once again, the more enquiries you make, i.e., the more you apply for credit, the more credit-dependent you seem. Therefore, try to keep your credit enquiries low by only making applications when necessary.
Credit is of different kinds, and it is good for your CIBIL report if it reflects a healthy mix of all sorts of credit. These different kinds of credit include but are not limited to mortgages, loans (secured as well as unsecured), credit cards, etc.
The length of your credit history also determines how good or bad your CIBIL report will be. This refers to the age of the accounts on your credit report, i.e. how old those accounts are. You should strive to have a longer credit history as it positively impacts the credit report. A credit history that is about six to ten years long is generally considered to be good.
Read More:: Is 772 a Good CIBIL Score?
It is a good idea to check your CIBIL report regularly. It helps you stay updated on the status of all your credit accounts and ensure you are on time to make all payments. It is also beneficial when you want to apply for more credit since you can assess your eligibility before filling out applications. Here is how you can check your CIBIL report online for free:
Step 1: Open the official CIBIL website (www.cibil.com) or download their mobile application.
Step 2: Log in to your account with your username and password. If you do not have an account, you can create one by clicking on 'register'.
Step 3: Once logged in, click on the option 'Get Your Free CIBIL Report' option, and you will be provided with your detailed CIBIL report.
One thing to be noted is that everyone is entitled to one free CIBIL report per year. However, do not worry if you desire to check your report more frequently. You will find paid subscription plans on the CIBIL website. If you opt for them, you will be able to access your CIBIL report more than only once every year.
Read More:: What is Experian Credit Score and How It Affects You
A CIBIL report is a detailed account of a person's credit history. TransUnion CIBIL, one of India's most prominent credit bureaus, generated this report. Your CIBIL report includes your personal information and all your account details. It gives a comprehensive account, including account types, loan amounts, outstanding payments, etc. A major component of the CIBIL report is the CIBIL score. It is a three-digit number that can fall anywhere between 300 and 900. The CIBIL score is like the crux of the report and directly reflects how good or bad you have used your available credit. The higher the score, the better it is considered. Factors that affect your CIBIL score and CIBIL report include your repayment history, credit utilisation ratio, length of credit history, credit mix, number of credit enquiries, etc. Because the CIBIL report is essential to your financial experience, you must check it regularly. You can get one free CIBIL report every year on the official CIBIL website or mobile app. If you want to keep track of it more frequently, you can choose a paid subscription plan on the website. Ensure you adopt good financial habits and maintain a healthy CIBIL report to increase your creditworthiness.
1. Where can I see my full CIBIL report?
Your complete and detailed CIBIL report is on the official CIBIL website or mobile app. You can do so for free once a year or opt for a paid subscription plan that lets you check the CIBIL report much more frequently.
2. For how long does CIBIL keep a record of my credit history?
CIBIL records the last seven years of an individual's credit activities.
3. Can I see my credit score in the CIBIL report?
Yes, you can see your credit score in your CIBIL report. The credit score is one of the most important components of the CIBIL report. When you get your CIBIL report, you can see your credit score in the top righ corner of it.
4. How can to improve my CIBIL report for getting a loan?
Suppose you want to get a loan and desire a good CIBIL report. In that case, you should adopt healthy financial activities such as paying back your dues on time, making minimum credit enquiries, keeping your credit utilisation ratio as low as possible, having a good mix of different types of credit, etc.
5. Who can see my CIBIL report?
Apart from you, your CIBIL report can be assessed by your current and potential lenders. This means any banks or institutions currently providing you with a loan, or a credit card can look at your CIBIL report. The lenders who receive your credit application can pull up your CIBIL report.
6. Is the CIBIL report the same as the Equifax credit report?
Both CIBIL and Equifax are India Credit Information Companies and perform similar functions. The only difference is that they may use slightly varied parameters to judge your credit history and behaviour. This could lead to a difference between the credit scores generated by the two bureaus. However, this difference will be small and insignificant.
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