Mistakes to be avoided when trying to improve CIBIL score

A credit score is something that reflects your credit history and thus it is something that cannot be built or destroyed in haste. A lot of factors contribute in making or breaking your credit rating. Being a responsible borrower is the simplest way to having a good cibil score; but if you have not done that then you will have to work on trying to get a better score. While there are certain things that can help you build your score, there are some other aspects that can pull it down. So here is a look at few things to avoid if you are looking at improving your score.

  • Excessive Use of Credit Card: Credit cards are a great convenience but their use may often be criticized as one can easily go overboard and regret it later. However one may think that if they manage to pay their full dues on time the credit card usage will never cause a problem, but this notion is wrong. Using your card judiciously is important if you are looking at improving your score. This means that you need to limit your credit card expenditure per cycle to 40% or less of the sanctioned cared limit. This is known as credit utilization ratio and this needs to be calculated per card wise as well as for all cards put together in case of multiple cards. High credit utilization can harm the score as the user appears to be credit hungry.
  • Making too Many Inquiries: When you apply for a loan, the lender seeks your CIR from the credit agency which is known as a hard inquiry. Each hard inquiry is recorded in the CIR and impacts the score negatively. Thus if you truly require a loan then make sure you research well before you actually apply for a loan. This will ensure that your loan application is not rejected which will eliminate the need to apply for a loan elsewhere. So for example if you want to buy a new car and need a loan for it, then carefully research about car loans Check which lender offers loans at what rates, what is the LTV ratio, what are the documents required, at what credit score they are willing to offer loans and so on. You should then approach a lender who you know meets your requirements and who will be willing to lend to you based on your rating and profile. Refrain from making unnecessary enquiries.
  • Settling an Account: Consider an example to understand this aspect. Priya is looking at improving her credit score so that she can apply for a home loan next year. She goes through her CIR and spots an old credit card debt; she decides to take care with an aim of improving her score. She got in touch with the credit card company and she paid the dues after some negotiation. Hoping to see her score improve she got her CIR but was dismayed that it had reduced further. If you are as confused as Priya that why did this happen then we have an explanation. When you pay old dues then the fate of your score depends on how this repayment is reported. If the account is reported as settled then it could mean trouble as it will raise a question mark in the minds of all future lenders about getting their money back in full. If the debt is reported as simply being paid then it will have an opposite impact.  
  • Guaranteeing a loan without thinking: Sometimes an applicant may find it difficult to get a loan on his/her own due to lack of proper documents, low score, not meeting the eligibility criteria and so on. In such a scenario they may ask someone to guarantee their loan. Well this can definitely ease out the problems for the person seeking the loan but may cause the guarantor to land in a tricky position without realizing so. If the applicant fails to pay his/her dues on time then the guarantor may be asked to do soon. What’s more each delayed payment can harm the score of the guarantor as well. So though you may be servicing all your loans on time you score may still be low because of a loan you guaranteed. Thus if you plan to guarantee a loan, do it after being sure about the applicant, you own ability to service it in case the applicant fails to so and also after you are sure about its impact on your own credit score.

Often small things can cause your score to dip. Thus make sure you steer clear from the above mistakes if you want to be credit healthy.

 

How Your Credit Score Affects Your Happiness

There are a number of things that account for our sense of fulfillment. For example, wealth, attractive job, health, etc. are some of the things that are commonly associated with our overall happiness. However, do you know that your credit score can also affect your happiness?

Your credit score is not just an indicator of your creditworthiness but also of your happiness. If you think about it, it makes a complete sense. Who do you think is more likely to be happy with their life- a person with low credit score who is struggling to get a personal loan, or a person with an excellent credit score who knows that they won’t have any trouble if they needed a loan in the future?

The following are some of reasons why a good CIBIL rating can also increase your level of happiness:

  1. Better Management Equals a Comfortable Life

It is extremely difficult to build a high credit score without being good at managing things, and without being responsible. It takes patience and dedication to create a good score. You have to pay your EMIs on time, do credit check from time to time, and also avoid your credit cards from collecting debt. All this is not possible if you are not good at management. However, if you are good at management then your life is also likely to be easier and you will run into problems much less frequently than others.

  1. Peace of Mind

Financial emergencies lurk at every corner of your life. If you had to move to a new city one day, or had to pay for hefty medical bills for someone close to you then it is possible that may fall short on cash and need a personal loan. Unless you have a high CIBIL score it can be really difficult to get one. Thus, when you have a good score it gives you a peace of mind that you can deal with any kind of financial problem in future should it arise.

  1. Job Eligibility

A good job is often related to your happiness, and lately it has become mandatory to have a good track record in terms of credit history if you want a job. Many companies, especially banks and other financial institutions have started taking the job applicants’ credit history into account when filtering the candidates. In fact, when SBI published an advertisement for job openings it clearly mentioned that those candidates who had ever defaulted were not eligible for the jobs.

  1. Savings

A high credit score is also linked to your savings. It has been found that the people who have a good credit score also tend to have decent savings which can be helpful in rough times. Since decent savings means comfortable life, they also attribute to your general happiness.

So, by now you must have got a good idea why a high credit score is important for your happiness. If you are not satisfied with your current score then you can always improve in by doing a few basic things, which are:

  • Paying EMIs and Bills on Time: The best way to increase credit score is by paying your loan EMIs and credit card bills on time. Credit bureaus regard this habit with great admiration and show it in your credit score.
  • Credit Report Monitoring: If you want to avoid developing a poor credit score then it’s best that you inculcate a habit of checking your credit report from time to time. This has two advantages. First, you can identify errors or discrepancies in your report and have them corrected. This will immediately improve your score. Second, if you notice that your score has been dropping lately then you go through your report and find out the reason easily.

According to CIBIL’s scoring system your credit score should always be higher than 650 (as the maximum possible is 900). Any score higher than that is considered good, and you can get a loan easily. Similarly, having a low cibil score than that could lead to a challenging and unhappy life.

Guide for steps to be taken if wrong loans get reported in CIBIL report

A CIBIL Report is made after collating and collecting a lot of data. This data may pertain to loans, credit cards, payment details, individual’s personal details and employment details. Any credit rating agency be it CIBIL or some other agency just collects the data that is provided to them by various lenders and presents it in the prescribed format and uses the given data to compute the credit score. However sometimes due to error in data provided by some lender, manual fault etc there can be some errors in the CIBIL Report.  A credit check from time to time not only ensures that the person can assess his credit health but also helps one in spotting such errors.

Types of Errors in a CIBIL Report:

As we said there is a lot of information and data provided in a credit report thus there can be various types of errors. While some errors may impact CIBIL score calculation others may not. However it is important to mention that regardless of the impact of the error on the scoring it is imperative that they are rectified at the earliest.

The errors can pertain to wrong reporting of the name, address, date of birth, PAN, Aadhar and other such details. One’s employment details like name of the current or past organization of length of service etc may also be reported wrongly. These errors do not impact the credit score directly.

Then there are errors which can cause trouble as they impact the credit score calculation. These are reporting of a loan that does not belong to you, showing a payment default which did not happen, a larger than actual overdue amount, inaccurate account status (defaulted/settled), wrong loan closure details. These errors can cause your credit score to be low and require immediate attention and correction. Reporting of a loan that does not belong to you lowers your borrowing capacity and any default that may occur on that loan will be reflected in your credit report.  There can be multiple reasons for these errors like the problem may occur at the time of entry or some confusion about an address or PAN details etc.

How to Get the Wrong Loan Removed from the Report?

The first reaction of anyone on seeing a loan that does not belong to them on their CIR would be confusion and panic. However rest assured it is not such a serious issue and can be resolved. The key is to keep checking your report from time to time so that you are aware of the mistakes if any. Problems arise when a person checks their report just before they want to apply for a loan then there might be no time to get the mistake rectified. Worse still they may realize that there is a problem after a loan has been rejected due to a low cibil score. So here are the steps that need to be taken when you spot an error in the report:

  • The first step in obviously to get your CIR and go through the entire report thoroughly so that you know what it contains. Just looking at your CIBIL rating online will not help as one may not be aware of the contents of the report or about the loan listed in it.
  • The next step is to inform CIBIL about the error and register a complaint. This can be done online too. There is dispute resolution option on the CIBIL website, one can fill the complaint form, the 9 digit number from your CIBIL report is mandatory for filling this form.
  • The error may have happened at the level of the credit agency or the lender. Depending on where the error originated the next step would be taken. If the error is at the level of the agency then it can be rectified faster.
  • However if the loan has been erroneously reported by the bank then since CIBIL being just an aggregator will not be able to make any changes on their end and will get in touch with the concerned lender.
  • One can expect a resolution within 30 days of filing the complaint. If one is not satisfied with the resolution then the complainant can approach CIBIL again and if still the matter is not resolved then one can approach the banking ombudsman.

Do follow basic credit health rules and keep checking your credit report from time to time to stay credit healthy. If there is an error, don’t worry there is way to resolve it.

 

Are CIBIL Score and CIBIL Report Two Different Things?

Whenever you apply for a credit card or a loan at banks or NBFCs they perform a credit check and determine your creditworthiness. It is calculated on the basis of two factors: CIBIL score and CIBIL report. Although they both complement each other and serve the same purpose (helping lenders determine credit lending risks), they are different from each other in many ways. To understand these differences, you must first know what these two credit evaluation factors are exactly.

Credit Score

There are many credit bureaus of India that maintain and provide credit scores of different individuals to the banks and other financial institutions. Some of the popular credit bureaus include CIBIL, Equifax India, Experian India, etc. These bureaus analyse your credit history, payment patterns, credit utilization habits, etc. for your credit score calculation. Generally speaking, the higher is your score the greater is your creditworthiness. In other words, if you have a high credit score then you are considered as a responsible credit user, and lenders will find it easy to trust you with lending a loan or approving a credit card. On the other hand, if your score is less than average then your credit utilization behaviour is not considered satisfactory, and thus lenders will shy from lending you credit. Even if you are able to get a loan with a poor credit score you will likely have to pay a high interest than normal.

Credit Report

As the name suggests, your credit report contains the summary of your credit-related activities. Thus, it covers your loan payments, credit card bill payments, existing debt, etc. It also contains your personal information- name, address, contact information, bank account information etc.

The CIBIL report is divided into the following sections:

Personal information

In this section the report presents your personal details, such as name, address, phone no., voter ID number, PAN number, passport number, etc.

Employment Information

As the name suggest the “Employment Information” section contains your employment details. It includes your current occupation and income. You may find the information here outdated, as this section is updated when you get a loan for the first time. So, if it has been many years since then and you have switched jobs then CIBIL may not have updated the same on the report. You have to inform them of the same to make the changes.

Account Information

It is one of the most important sections of your credit report, as it contains your financial details which matter the most to the lenders. Section fields include your credit limit, pending debt, no. of collaterals and their values, etc.

Enquiry Information

This is another important section of the credit report. It contains the list of all the enquiries that have been made by the banks and NBFCs in the past 1-2 years. If a lot of enquires have been made in a short period of time it shows two things- that you are credit hungry, and that many lenders have already rejected your applications. Thus, it raises a red flag and affects your score negatively.

More on the Differences

It must be clear to you by now how a credit score is different from credit report. However, there is another major difference that must be pointed out. While the format of the credit reports followed by most credit bureau is similar, there scoring system can vary greatly. Thus, it is unlikely that you will get the same score from different bureaus. There are two reasons behind it-

  • Different credit bureaus use a different formula for scoring. Thus, one bureau might deduct 10 points on every delayed payment in the past 6 months, while other might deduct 20.
  • The floors and ceilings on the scoring spectrum vary from one credit bureau to another. For instance, CIBIL provides a score ranging between 300 to 900 and Experian from 1 to 1000.

Conclusion

No matter which credit bureau your lender has partnered with, developing good credit utilization habits is extremely important. Make sure you check your credit report from time to time, especially because it’s easy to get a free credit report India.  Pay your payments on time, and don’t use credit cards excessively. Even little things like these can make a big difference to your credit score.

 

Beware – Your Job Application May Get Rejected For Poor CIBIL Score!

Have you been facing rejection by the recruitment companies again and again despite having a good academic record and experience? Maybe you should check your CIBIL score. Yes, you read it right! The significance of CIBIL score has penetrated the hiring industry as well recently. What used to be a benchmark for financial institutions to gauge an individual’s creditworthiness, has now become a standard for assessing reliance. Many companies belonging to the banking, financial services and insurance (BFSI) sectors have started checking the credit score of the applications during the selection procedure.

Taking CIBIL rating as a benchmark for integrity and dependability may come as a surprise for Indian citizens, but many western countries have been following the same for quite some time now. In fact, many western companies give a lot of importance to candidate’s credit score and credit report when considering their application.

Here are a few major reasons why a CIBIL score check helps the recruiters to understand the abilities of a candidate better:

  1. Responsibility

A responsible credit user who always pays their payments on time, and never allows a high debt accumulation, is highly likely to be a responsible person in general too. In fact, without being responsible and careful you can’t have a decent credit score. So, when the recruiters get CIBIL rating online for a certain job application they can get an idea of how much responsible and trustworthy the person is.

  1. The Stress Factor

Most people who have a poor credit score are also likely to be more stressed out than those who have maintained a good score. The reason is simple- if a person is having a bad score, they are likely to be falling behind with their payments. There is also a possibility for defaulting, which puts them in a risky position. The hiring company is natural to think the candidate might not perform well at their job when they have such a high level of stress due to debt accumulation. Also, there is no telling when the person enters a financial crisis that takes away their focus from the work altogether.

What to do If you Have a Poor Credit Score?

It is incredible how easy it is to get a free credit report India. You just need to fill out an online form, provide some basic details, and then pass the CIBIL consumer login phase to receive a copy of your report in your email inbox.

If you find out that your score is poor, then it is important that you improve it as soon as possible. Since it is a time consuming process, it is best to get started immediately.

For starters, you can start becoming regular with your EMIs and credit card payments, and lowering your credit usage. You can also get your report corrected for mistakes, which will improve your score as well.

Many times innocent people who have been responsible with their credit usage also get a bad score. A major reasons for this is identity theft. The culprit uses their credit irrationally and blatantly, which causes a major drop in their score. If this is the case with you then you can inform the hiring company of the same. They are likely to understand your situation and take the next step accordingly. In most cases the companies verify your statement by going through the report themselves, and get more information from CIBIL, if required. If everything looks alright they will ignore your credit score and proceed further.

What to do if You Want to Improve Score Fast?

If you don’t have a good reason why your score is bad then improving it is your best option. But what you could do when you don’t have much time at hand, and the job you are interested is only available for a limited time?

If you want to facilitate the process of score improvement, then it is best to hire a professional. A credit consultancy company such as Credit Sudhaar can provide some of the best credit experts who will go through your report and then devise the best strategy that can improve your score in the soonest possible time. In fact, depending on your situation you can see significant improvements in just a few weeks.

Why is high CIBIL score valuable

A CIBIL score is a three-digit numeric that reflects your creditworthiness. The score ranges from 300 to 900, with 300 being the minimum and 900 the maximum. Most banks and other financial institutions will require that their clients hold a score of at least 750. The closer your CIBIL score is to 900, the easier it becomes to avail loans. A good score i.e. from 750 to 900 can help you avail credit quicker and at low interest rates. On the other hand, a poor score may limit your options when it comes to lenders, and institutions willing to lend you loan for bad credit may do it in exchange for high interest.

A good score is important as it simplifies your financial journey. Since our dependence on credit has gone up in recent times, a good score can help avail loans and credit cards much sooner. Your credit score reveals your financial behaviour. Having an excellent score shows lenders that you take payments seriously and that you can be trusted to make repayments on time. A good score is important when it comes to availing personal loan, car loan, home loan, credit cards etc. While it is possible to avail loan for bad credit you can be sure there are some tough strings attached. So to improve your chances of getting your credit application accepted practice the different measures to increase CIBIL score.

An excellent score will help you fetch the best interest rates as well as terms. Banks and other financial institutions tend to charge low rates of interest on those who have a good credit score. You can be sure that if you hold a score of above 750 then lenders will charge you less for borrowing. This is mainly because the institutions consider you less risky compared to those who have poor credit scores. If you have a poor score and are availing loan for bad credit then lending institutions are very likely to charge you exorbitant interest rates as well as stringent terms and conditions. Taking out loan for bad credit will cost you heavily as lenders see you as risky clients. So in order to avoid that situation from occurring, practice the different ways to increase CIBIL score.

It is not just the lending institutions that take an interest in your CIBIL rating. Landlords, insurance companies and employers can also undertake credit checks. Landlords can look at your score to assess whether or not you will pay your rent on time. Some insurance companies use the score to decide on the insurance premiums. Employers can be interested in your credit health checks to see how well you manage your finances. It is to be noted that companies do not conduct credit checks for all positions, just for the top management. Since there are several parties that take an interest in your credit history, make sure to always maintain a high credit score at all times.

If you have a poor score, chances are that you may have come across many offers of loan for bad credit. When lenders present you their offers, be sure to read between the lines to ensure that they are authentic. If a company calls you offering loan for bad credit, look to see if the company has the required license to run the business. Look at the interest rates they are charging. While interest on loan for bad credit generally tends to be high, it should not be more than what other financial institutions are charging. If you wish to avail a loan it is best to wait until your rating moves up so that you get the best deals in the market. However if you have an urgent need of funds, make sure to go through the company history first before entering into an agreement.

If you are looking to increase CIBIL score, there are a number of ways you can do it. Start by first ensuring that all your payments are made on time. Your payment history is taken into consideration when calculating your score. Missing out on a couple of payments will hurt your score. So make sure that your repayments are made on time to increase CIBIL score. The second measure to raise your credit score is by maintaining a low credit utilization rate. When your credit utilization is low, your score will go up. If your credit utilization is high, your score will take a beating. Handle your credit cards wisely and do not simply splurge. To spend only when necessary and financial discipline can help increase CIBIL score. You can also reach out to a reliable credit advisory company who will tell you the different ways to increase CIBIL score. If you have a poor CIBIL rating, they can help you with credit repair and tell you how to avoid bankruptcy. Additionally, they will help you with effective financial planning and financial discipline.

 

 

 

Does credit card limit has any impact on your credit score?

A good CIBIL score ensures that you can have an easy access to financial services in times of need. You can qualify for loans at a low rate of interest as a good CIBIL rating demonstrates that you are financially stable. There are several factors that go into the calculation of a credit score. Though different agencies have different credit scoring algorithms the major influencing factors for all of them include the payment history, credit utilization ratio, length of the credit history, type of accounts and new credit.

Credit utilization ratio has a strong correlation with the credit score. This ratio depends on two factors. Your total outstanding balance and the credit limit. A credit limit is the maximum amount that will be extended to you by the lender. You cannot charge more than that amount within a stipulated period of time. If you do not know your credit limit, you can either sign in to your credit card account to view the limit or call and ask the card company.

The credit utilization ratio is calculated by dividing the total outstanding balance on all revolving accounts with the total credit limit. For example if you have a credit limit of Rs 3,00,000 and your outstanding balance at the end of the month is Rs 2,40,000, your credit utilization ratio is 2,40,000/3,00,000 i.e 0.80. This means that you are using 80% of the available credit. This high ratio is a strong warning sign of credit risk. It indicates that either you are living beyond your means or you are experiencing financial difficulty. Your profile is considered risky as you may have trouble making future payments. Hence a high utilization will bring your credit score down. If your outstanding balance is only Rs 30,000 then the ratio will be 30,000/3,00,00 i.e 0.10. A low utilization ratio is a sign of financial soundness as you are not using too much of available credit. This works in favour of the credit score. Hence the credit card limit directly affects the credit utilization ratio and therefore the credit score of an individual.

Does a low credit limit translate into a low score?

If you have a low credit limit, it does not necessarily mean that you will have a low credit score. If you pay your credit cards in full each month before the due date and do not carry any balances your credit utilization ratio will be zero. In this case the amount of credit limit will not have any effect on the score. It is always a good idea to keep the credit card balance as low as possible in relation to the total credit limit. If you do so you can keep the overall credit picture healthy even if your limit is not too high.

Should you request for a credit limit increase to raise your score?

 

If you are looking to improve credit score, then a higher credit limit will definitely be a good thing. You can either request your current credit card company to raise your limit or apply for a new credit card. Even if the amount owed by you remains the same, a high limit will result in a lower debt utilization. It is suggested to keep the utilization below 30% if you are trying to improve credit score.

 

When a card company extends your credit limit it increases the amount of debt you can incur and gives you greater buying power. Just make sure that a high limit does not tempt you to increase your spending, otherwise the whole purpose of getting the limit increased will be defeated. Take into account your saving goals and exercise financial discipline. Use the limit only when you really need it. If you are not careful you will carry more balances each month and that will translate into paying more interest to the card company.

 

Will closing a credit card account affect my credit score?

It is never a good decision to close old unused credit cards just for the sake of cleaning up your credit profile as far as credit score is concerned. That’s because closing a card will reduce your total credit limit available and increase your credit utilization ratio.

Your credit card limit surely has an effect on the credit score. But it is only one piece of the puzzle. If you are trying to improve credit score it is necessary to look at the bigger picture. Paying down outstanding balances and maintaining a clean track record of on time payments also go a long way in enhancing your score.

 

Credit Report ‘Red Flags’ that could damage your score

If you have ever applied for a loan or a credit card you must be aware that creditors check your credit score to understand whether you are a trustworthy customer or not. If your credit score is not in good shape you will not be approved for the loan. Your credit score is completely based on the information recorded in your credit report like payment history and outstanding balances of all your credit accounts. Hence keeping a regular check on your credit report is vital for your financial health being. It will help uncover warning signs that may be responsible for damaging your score.

Here are 7 red flags that you should look for when you analyses your report.

  1. Inaccurate information- Basic personal information like name, address, date of birth and employment details should be up to date and correct. Any inaccurate data should be reported immediately as this may be a sign of identity theft. You may have good credit management habits but if someone uses your identity to open new lines of credit it will have a devastating effect on your credit score.

 

  1. Too many credit cards and accounts- While it is good to have a mix of different types of credit accounts having too many cards gives a negative impression to the lenders. It puts you in the category of high risk customers who do not exercise financial control and spend beyond their means. So if you have numerous lines of credit that are maxed out, then you may be flagged as a desperate borrower who already has sufficient credit limit. This negatively impacts your credit score.

 

  1. Co-signed loans- While it is good gesture to help friends in need by offering to co-sign the loan, it may not be good for your credit report. When you become a co-signer the loan account appears on your credit report and increases your debt to income ratio. So when you yourself apply for a debt, lenders reduce your credit eligibility by that amount. Moreover, if the primary applicant fails to make the payment it will negatively affect your credit score. Hence when you analyses your Cibil report check if regular payments are being made on the loan co-signed by you.

 

  1. Too many enquiries- When you apply for a loan, the lenders pull out your credit report to understand the credit risk associated with lending you money. While one or two such enquiries do not harm, much excessive enquiries pose a lot of risk. They signal a red flag that you are desperate to obtain credit and bring down your credit score. A wise method to avoid this damage during loan shopping is to file all applications with different banks within a short span of time. All enquiries within a 14 day period are clubbed as a single enquiry. So when you are shopping around to find the best deal be careful about the timing of filing applications. Alternatively, you can get a copy of your credit report and score and provide it to all lenders so that they can use it to make their lending decisions. This way you can minimize the hard hits on your credit report.

 

  1. High debt to credit ratio- Debt to credit ratio is another element on the credit report which signals a warning sign for the credit score. If your outstanding balances on the various lines of credit is very high compared to your total available credit limit it may tarnish your credit history. If you max out your cards it increases the risk of default from the lenders point of view and hence damages your score.

 

  1. Payment behaviour- A very important aspect that the credit report reflects is your payment pattern. If you show irresponsible attitude with respect to managing your debts it would damage your credit history. Series of late payments or defaults signifies a bad sign for your credit score. Paying only the minimum balance required rather than the full balance also indicates that you are in a financial trouble and can be listed in cibil defaulter list in future.

 

  1. Collection notices, foreclosures, bankruptcies- All these are red flags which stay on your report for a long time. These elements indicate that you were unable to meet your debt obligations and signal that you may not be able to arrange for funds in future too to pay back your lenders. Such remarks are damaging to your credit score.

 

These are some elements that you should look for when you analyses your credit report. These warning signs indicate that you need to take a proactive step and focus on repairing your credit history in order to prevent it from damaging your score.

Understanding the Basics of CIBIL Report

Your CIBIL report (also referred to as CIR report) is a file that contains the information about your credit history. It contains the details of the current and previous loans that have been taken by you, bank account number, account type, list of enquiries made by banks or lenders, credit limit provided to you, etc. it also contains your basic personal information.

If you want to learn how to correct CIBIL report you should understand its basics first.

Your CIBIL report contains 5 different sections apart from the CIBIL score section. These are:

1) Personal Information

In this section your personal details are provided. Here you can find your name, date of birth, and gender. Apart from that it could also contain the details of some or all of this: income tax ID number (PAN), passport number, voter ID number, driver’s license number, ration card number, and unique ID number.

2) Contact Information

The next section that you‘ll find on your CIR is the Contact Information section. It contains your phone numbers, email addresses, and residential addresses. When a bank checks a CIBIL report this sections helps identity the account holder.

3) Employment Information

The employment section carries your employment details such as your income (either monthly or annual). The mentioned income may not be your current income but the one you provided at the time of your loan application.

4) Account Information

This section is the most information section, especially for your loan lenders. It carries your credit information such as the name of your previous and current lenders, types of credit facilities available (such as credit cards, home loans, personal loans, education loans, etc.), account numbers, payment history, current balance, loan amounts, etc. Most importantly, it contains the detailed record of your last 3 years’ payment history regarding loans and EMIs. All these factors affect your credit score and are also influence your lenders when they consider you loan applications.

Here are some of the things that you should carefully look at in the Account Information section of your report before you apply for a loan or a credit card:

  • Account Details- It contains details such as your name, account number, account type (such as home loan, credit card, etc.), date of account opening and closing, and the latest date when updated information was provided to CIBIL.
  • Account Status- If there are any settlement issues pertaining to your account or if it has been written off by a lender then it would be mentioned in the report. The same goes for when you are on a loan defaulter list. Your future lenders are unlikely to approve your loan application is they will see any mention of such things in your report. For your understanding the definitions of “Settled” and “Written Off ” are given below:
    • Settled: If you report mentions an instance where an account was settled then it means you had made it to the loan defaulter list and the lender had to settle for a lower amount than the outstanding amount.
    • Written Off– When it has been more than 180 days past the due date for a pending bill or EMI then your bank writes off the amount and reports it to CIBIL.

Both the status mentioned above affect your score negatively.

5) Enquiry Information

Whenever a bank or some other institute requests for a copy of your CIR to CIBIL it accounts for an enquiry. The information of the recent enquiries of your report is mentioned in this section. If a lender notices multiple enquiries that have been made in a short period of time then they may see it as an act of desperation and decide to reject your application.

A lot of times people get a low CIBIL score because of errors in their reports.  If you too have come across any error in your report then you can get it fixed and improve your score easily. However, to make that possible you must be able to understand your report first. The information given above will be able to give you a better understanding of CIR.

 

 

Monitoring Your CIBIL Score: What Are The Benefits?

Staying up to date with your CIBIL score has a number of benefits- you can detect emerging issues, or correct the existing ones before they snowball into bigger problems. Besides, you can save both time and money that you would otherwise have to invest if you realize about the problems eating up your credit score at a later point in time.

The importance of monitoring your CIBIL report can’t be emphasized enough, and when for a few hundred Rs. you can a copy of your original CIBIL report from CIBIL’s official website there is no reason why you should not keep an eye on your score from time to time. In fact, you can get a free CIBIL report online. which is not that accurate but can certainly give a rough estimate.

Here are the steps for obtaining original CIBIL report from official CIBIL website:

1) Create an account on CIBIL.com and upload necessary documents viz. ID proof, address proof, etc.

2) Once your account is created you can make the payment for the report, which is about five hundred rupees. However, you are free to choose any payment method such as net banking, debit card, etc.

3) Once the payment is made CIBIL will verify your credentials. You will be asked 5 questions that are based on your credit history. Correctly answering at least 3 of them will complete the authentication process, and CIBIL will send a copy of your report to your email address within 3 business days. If you fail in answering any 3 questions you will still get a report, but it will be sent to your home address instead of email address for security reasons.

What to Look For in a CIBIL Report?

When monitoring your CIBIL report make sure you check for the following:

  • CIBIL Score: Your CIBIL score is the first thing that you should check when you receive your report. Compare it with the score that you saw the last time you checked your report. If you see a drop then it is a matter of concern. If you see a boost then you can keep doing whatever you are doing to make score better.
  • Discrepancies: Every time you get a free CIBIL report online, or an original copy make sure you check it thoroughly for discrepancies or mistakes. Even a small mistake in the report can damage your score. In most cases you can rectify the mistakes by reporting them to your lending institution which will then send the correct data to CIBIL. You can check the updated report after 30-45 days and confirm the changes. Depending upon the significance of the data your score can easily increase by 50 points.
  • Remarks/ Comments: Believe it or not, the comments and remarks left by your lenders in your CIBIL report can affect your chances of loan approval in future. Even though these comments don’t really affect your CIBIL score they can influence a potential lender to cancel your loan application. If you see any negative comments in your report then you can request your bank to have them removed.
  • Remaining Debt And Payment History: Analyzing your credit report can greatly help in managing your expenses and the loans that you may have taken. This is because the report carries all the information of your current debt and payment history. You can go through it to see how well you are doing, and manage your expenses better. If you notice that you have been delaying EMIs lately then you can try becoming more regular and save your score from a negative impact.

A large number of people are looking for ways on how to “check my CIBIL score online free” lately. Fortunately, there are plenty of websites on the Internet that can provide an estimated score by using the information provided by the applicant. Still, it is highly recommended that you get an actual copy of your CIBIL report to have a better understanding of your situation.