The medical report determines your physical health, whereas Credit Information Bureau (India) Limited (CIBIL) report determines your financial health. The healthier your credit report is, higher are the chances of credit approval at better interest rates. It is like your financial character certificate. If the numbers are in a safe limit, you are a safe bet for the lender. However, maintaining a good credit score and healthy CIBIL report is an ongoing process. If your credit score is poor, you can work towards improving it.
Contents of CIBIL report
Also known as Credit Information Report (CIR), it includes five sections along with your credit score. Let us understand the different sections in a CIBIL report in detail and their relevance to you.
The score ranges between 300 and 900. Higher the score, the better your credit health is. The section also mentions percentage of new loans sanctioned in the last one year in various score bands. If you haven’t taken any credit in previous years, the score can be NA or NH, meaning no history available or new to the credit system.
It mentions your name, PAN number, passport number, date of birth, Aadhaar number etc. Banks and lending institutions you are associated with share this information with CIBIL.
Action: Go through all the mentioned information to check if it is correct and updated.
The contact details shared by banks and other lending institutions are mentioned in this section. Address/es, phone numbers, and e-mail IDs are given. Up to four addresses can be mentioned, which could be your permanent, correspondence, temporary and office address.
Action: Check for any discrepancy or incorrect information and get it corrected/updated.
One of the primary factors to evaluate your creditworthiness is your employment record. This section in the CIR enlists details about your employers and monthly/annual income. The income mentioned is not the latest. It is the one declared to the lender at the time of previous loan application.
Action: This section is for information only and helps lenders evaluate your income growth.
This is one of the most important sections that not only impacts your credit score but is also evaluated in detail by potential lenders. It includes lender’s name, type of credit, account number, account status, days past due (DPD), date of account opening, loan amount, last payment date, current outstanding, total outstanding and monthly record of your payment of EMIs and bills for last three years.
Action: Make sure the details are correct. For example, a typing error in date by even one day can affect your score. Also, check if your account status has been marked as settled or written off as ‘filed’. If not, it can have a negative impact on your credit score. DPD is the number of days by which you delayed your payment. It should ideally by ‘000’, i.e., payments are done on time.
In this section, there are details about which lender has enquired about your credit score and CIR. It also mentions the purpose of applying for loan and the loan amount. Too many enquiries from different lenders highlights the desperation for a loan. This may make the lender cautious about sanctioning your loan.
Action: Think thoroughly before applying for a loan with any lender. High number of enquiries can derail your chances of getting a loan.