What is CIBIL Report - CIBIL Meaning and Calculation

Understanding what is CIBIL report and reviewing it regularly has multiple benefits. It helps you identify inaccuracies, track past and current debts, monitor fraudulent activities, and know how lenders perceive you when you apply for credit, etc. CIBIL stands for Credit Information Bureau (India) Limited, a credit information company that collects credit-related information from banks, NBFCs, credit card issuers, and other registered credit providers. Read on to know the CIBIL report meaning, learn what it is, why it is necessary, and how to study it.

What is CIBIL Report?

CIBIL report is a statement about your credit history and other credit-related activities that CIBIL generates and maintains based on the information your lending institutions provide. When you apply for a loan or credit card, the lending institutions use this report to assess your creditworthiness and finalise their lending decision. It helps them decide your loan approval, interest rate, loan amount, and other terms and conditions.

Importance of a CIBIL Report

CIBIL report plays a crucial role in your credit journey, as lending institutions use this report to understand your credit history and determine your creditworthiness. Following are the main reasons why the CIBIL report holds so much importance:

• Loan Approval: Your CIBIL report shows your creditworthiness to the lending institutions and NBFCs. Lenders won’t hesitate before lending a loan if your CIBIL report is spotless and shows a consistent repayment history. However, red marks on the report might lead to rejection.
• Interest Rates: If you hold a good credit report showing responsible credit behaviour, you may get future credit at lower interest rates. A good CIBIL report gives you more power to negotiate.
• Credit Limits: Financial institutions favour individuals with a good CIBIL report. Consequently, they feel safer lending you bigger loan amounts if they feel assured to get their money back on time.

Also Read: What Credit Score do I need for Personal Loan

How to Read A CIBIL Report?

Now that you understand the CIBIL report meaning, it's also essential to learn how to read it. A CIBIL report categorises your credit information into separate sections. Let's understand them in detail.

CIBIL Score

CIBIL generates a credit score, a 3-digit number ranging from 300 to 900. It showcases your creditworthiness, which lending institutions use to make lending decisions. The higher your CIBIL score, the better your loan eligibility. If this section shows an NA or NH, it indicates no credit history, short credit history, or no credit activities in the past few years.

Personal Information

The second section contains your personal information, including your name, date of birth, gender, etc., as mentioned in the CIBIL repository. It also includes your identity-related information like PAN, passport number, Aadhaar number, voter ID proof, driving license number, etc.

Contact Information

This section contains your telephone number, email address, residential address, etc. It also includes your home address, office address, permanent address, and temporary address. Updating this information is essential, especially if you change your address or phone number.

Employment Information

The employment information section contains your income and employment details you provided to the lender at the time of credit application.

Account Information

This is the most significant part of your CIBIL report, as the credit bureau calculates your credit score based on the information in this section. It includes details of all your loans and credit cards, including the lender’s name, credit type, account number, current amount, ownership type, outstanding balance, repayment details, etc. It contains a DPD (Days Past Due) column, which should be STD or 000. For instance, XXX means no information available, and 060 represents the payment is late by 60 days.

Enquiry Information

This section includes details about your recent credit enquiries. Whenever you apply for credit, the finance company pulls a hard enquiry to check your credit behaviour. The enquiry information section contains the lender’s name, loan type, loan amount, and application date.

Types of CIBIL Credit Reports

CIBIL generates two types of credit reports:

Credit Information Report

This report is meant for individuals, contains information about your past credit behaviour, and shows a statistically calculated CIBIL score.

CIBIL Company Credit Report

This report is meant for companies, as it contains a company’s payment history compiled based on information from multiple credit institutions. The purpose is to help finance providers make informed decisions about lending to companies.

What Are CIBIL Credit Reports Used For?

Lending institutions check your credit report to decide whether to approve your credit application. Even if you qualify, lending institutions determine your loan amount, interest rate, and other terms and conditions based on your past credit behaviour. A consistent repayment history makes lenders feel confident about timely repayment, convincing them to offer you a better loan offer. The credit bureau also uses your credit report to calculate your CIBIL score, a strong indicator of your creditworthiness.

How To Resolve CIBIL Credit Report Errors?

Many times, you may identify a credit account in your CIBIL report that you never opened or already cleared. It is common for credit reports to contain errors, spelling mistakes, wrong identity information, outdated contact details, etc. If you identify any errors in your CIBIL report, file a dispute with the credit bureau and request a correction. You may also approach your credit provider to give correct information to the credit bureau.

What Is The Difference Between CIBIL Report And CIBIL Score?

CIBIL is one of India's four credit bureaus that collect information about your credit-related activities and uses an extensive algorithm to generate a 3-digit CIBIL score. Therefore, the CIBIL report contains data, and the CIBIL score is the numeric value they generate based on that information.

Conclusion

Are you planning to achieve your financial goals or need funds in an emergency? Credit seems to be the best option to support you financially. However, checking your CIBIL report is essential to see how lenders will perceive you as a loan applicant before applying. You can check your CIBIL score by using your PAN card and work towards improving it if it is low. The CIBIL report will help you identify the areas where you want to work the most.

Frequently Asked Questions

1. How can I get my CIBIL status report?

You can visit CIBIL's official website to request your CIBIL status report. CIBIL will provide you with one report a year for free. If you want more, you can request a one-time report from CIBIL or subscribe to a 1, 6, or 12-month plan according to your requirements.

2. How can I check my CIBIL report by PAN card?

Visit CIBIL’s official website and request a CIBIL report by entering your PAN card and other details. Want to learn how to download your CIBIL report? Click on the report's link in your email and download it to save it on your device.

3. Why is a good Consumer CIBIL Score important for an individual?

A good Consumer CIBIL Score increases an individual's chances of loan approval, access to lower interest rates, and better credit terms.