How To Read & Understand CIBIL Report

Personal Finance

Maintaining a good CIBIL score is important for loan approvals. A CIBIL report provides important information about your credit history by analysing historical credit utilisation and loan repayment habits. So, you have received your CIBIL report and want to understand where you stand in terms of loan eligibility, this post can help. Read on to know how to read and understand CIBIL report. 

How to Get a Free CIBIL Score & Report?

To get your credit score and report, you’ll need to contact CIBIL, India’s credit rating organisation. There will be fees associated with obtaining a credit score and report. Individuals and institutions alike must pay a maximum of Rs. 500 to get this report; the application and payment process applies to both individuals and institutions. If a bank or financial institution needs a copy of your credit report with your score in order to determine your loan eligibility, they will be required to pay for it.

How to Read a CIBIL Report?

We have explained how to read below.

• Brilliant score – 700 to 800

This puts you in the top tier of creditworthiness, and when you approach a lender, they are usually very enthusiastic. This indicates that you have used your credit cards responsibly, have paid your card dues, repaid loans on time, have not accumulated large amounts of debt, and are generally a financially responsible individual. You have a modest default risk in trading terms. You will also be offered the best interest rates.

• Good score – 600 to 700

It’s possible that you’re not in the top tier. However, the loan will be granted. You’re still good even if you’ve missed/delayed payments or have a little misplaced loan portfolio. The lender may raise your interest rates by a few decimal points and need a little additional paperwork. However, if you are generally financially stable, a lender will issue you a loan or a credit card.

• Average score – 500 to 600

Have you been squandering your money? You may need to improve your financial prudence. While your credit score may indicate that getting a loan may be tough, you can attempt to improve it. Pay your credit card payments on time, repay your loans on time, maintain a healthy credit mix, and generally avoid activities that cause lenders or credit agencies to raise red lights.

• Bad score – 500 and below

You haven’t been particularly careful with your finances, have you? Because your credit history is likely to be littered with defaults and late payments, banks and financial institutions are unlikely to accept your loan or credit card application. To improve your grades, you will have to put in a lot of effort. It will take time, but it is not out of the question.

Importance of CIBIL Report

The pointers below emphasis on the importance of CIBIL report. 

• It aids lenders in determining your creditworthiness. 
• Lending decisions are made based on the information contained in the CIBIL credit report. 
• Analyzing your CIBIL credit report on a regular basis might help you develop financial discipline. 
• A CIBIL score of above 750 gives you negotiating power when it comes to interest rates. 

How to Get CIBIL Score?

An overview of your credit health, loan eligibility, and credit utilization. Credit score ranges from 300 to 900. The closer the consumer is to 900, the better chances of the consumer to get his/ her loan getting approved. 

• Navigate to the official CIBIL website and select Know Your Score.
• Fill out the online form, which requests information such as your name, date of birth, address, id proof, previous loan history, and other pertinent information.
• After completing the form and accepting the changes, you will be directed to the payment page. You can pay using a variety of methods, including prepaid cards, credit cards, and net banking. To obtain your credit report, you must make a payment of Rs.470 to CIBIL.
• You will be directed to an authentication page after successfully completing the payment. To authenticate your identity with CIBIL, you will be required to answer 5 questions about your credit history, at least three of which must be answered correctly. Within the next 24 hours, your report will be emailed to you.
• If the authentication fails, you can fill out and mail a hard copy of the application to CIBIL. The report will be mailed to you after that.

With Navi, the consumer can check and verify the loans and amount of EMI’s they are eligible for with their relatively lower credit score. Navi also helps its consumers in marking out various options of loans and what sort of loans can they avail themselves of with their credit score. It can either be a Joint loan or any other kind of loan that they can be bestowed with. 

Also Read: CIBIL Score Calculator And How To Check CIBIL Score Online

Different sections of Credit Report

A CIBIL credit report has various sections that offer detailed information about your credit history and score. The components that are incorporated in the CIBIL report are: 

• CIBIL Score – Your CIBIL Credit Information Report will show your CIBIL Score as the first item. This is an overall evaluation of your credit history that lenders use to determine your creditworthiness. A score is a single number ranging from 300 to 900. The higher your credit score, the more favorable your application for a new credit extension will be because it indicates that you have been repaying your loans on time and have enough disposable income to repay another loan if necessary. This is calculated using the information in the report’s Account Information and Enquiry Information sections.
• Personal Information – The second section of the report presents your personal information like your name, date of birth, gender, etc. as registered with CIBIL. The section also contains all the identifying information that CIBIL may have about you. This includes – Your name, gender, date of birth, and identity numbers such as your PAN, passport number, and voter’s number are all found in this area.
• Contact Information – The following section of the report includes your addresses, phone number, and email address. These details are recorded as they are shared by the lenders. The report would include your office address, residential address – both permanent and current – as part of the addresses. The report includes not only current information but also historical data. The historical data is limited to a maximum of four iterations.
• Employment Information – Based on the information you provided when opening an account for a credit facility or loan, this section contains information about your occupation and income. Again, this data is presented as is from what lenders submit to the bureau as part of the repayment information.
• Account Information – This section contains information about your credit facilities, such as the name of the lending institution, the type of credit facility (personal, home, overdraft, etc.), account numbers, the date the account was opened, the date the last payment was made, the loan amount, ownership information, the current balance, and month-to-month payment history.
• Inquiry Information – Every time you apply for a loan or credit card, the respective financial institution will access your CIBIL credit report. The vendor’s name, kind of credit, amount of credit applied, and date of application are all given in the report.

A consumer can check their CIBIL score and mark themselves based on their eligibility criteria for a loan. Install the Navi app on Android or iOS  for easy and instant loans by submission of minimal documents. 

Dispute Resolution

Individual CIBIL disputes and company CIBIL disputes are the two categories of CIBIL disputes. By filling out the CIBIL Dispute form on the CIBIL website, a consumer can always file a dispute over his or her CIBIL report or score. The CIBIL Online Dispute Resolution Form, which may be found on the CIBIL website, can be used to lodge any commercial CIBIL dispute.

It would take roughly thirty days for the CIBIL dispute to be settled after you have filed it. If there is a disagreement on your credit record, your prospects of receiving credit may be severely harmed. To settle disputes about your CIBIL report, CIBIL provides authorised channels and processes. Whether the entity filing the dispute request is a firm or an individual, the process is slightly different.

Also Read: CIBIL Correction: Overview, Types And Procedure To Raise Dispute 

Importance of Good CIBIL score

CIBIL score is important for numerous reasons, some of them being as follows: 

• Approval of Loans: A good CIBIL score acts as a catalyst in getting your loan approved. Because the proof of trustworthiness has already been checked, when a lender receives a loan application with a high credit score, it can process it swiftly.

• Interest Rate: A borrower with a high CIBIL score has a distinct advantage. They might be able to get the personal loan interest rate of their choosing and choose from a long range of lenders who give the best terms and conditions. Having a voice in the interest rate on your personal loan might have a big impact on the time it takes you to pay it off. You may control how quickly you become debt-free by controlling the interest rate on your personal loan.

• Loan Amount: Your personal loan’s ticket size is also determined by your credit score. If your CIBIL Score is high – naturally, you will be eligible to get sanctioned for larger amounts. A good CIBIL score means that your personal loan is approved with minimal documentation, in addition to the aforementioned benefits.

Also Read: How To Get Personal Loan With Low CIBIL Score or Without CIBIL Score?

Final Word

It is important for people to know that all is not lost, even if their CIBIL score is hanging under the low bar. A consumer can still ensure to establish it and get it increased by merely a few steps. One follows a combination of smart moves and in no time their CIBIL score would be up and running. 

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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.