How Is CIBIL Report Generated?

Suppose you are planning to invest in a company's shares. The first and foremost thing is to analyze the company, its past performance and the pattern of returns. In the case of banks, lending holds a similar importance. So before lending money, they need to check the creditworthiness of the borrower thoroughly to make sure the money will be returned in time and with interest. To ensure this guarantee, they refer to your past credit records, the CIBIL report, and your credit score or the CIBIL score. What is this, and how is it generated? Let's understand in detail.

What Is A CIBIL Report?

TransUnion CIBIL Limited, formerly called Credit Information Bureau (India) Limited, is India's oldest credit information bureau. It compiles credit reports, known as Credit Information Reports (CIR), which provide a comprehensive overview of an individual's credit history based on information from member banks and financial institutions. The CIBIL credit report is a financial report card detailing all financial activities and generates a 3-digit CIBIL credit score reflecting the individual's creditworthiness. A higher CIBIL credit score signifies responsible borrowing habits and enhances financial credibility. A score above 700 is generally deemed excellent, although some banks have higher standards while others may be more flexible.

Components Considered In CIBIL Report

CIBIL report is an exhaustive report of your credit journey so far. The components considered while preparing your report include-

Your Repayment History:

Your credit history is the most crucial factor in your CIBIL credit report. A poor credit history labels you as a risky borrower to banks and lenders. Lenders must report all your credit activities to CIBIL, impacting your credit report and score. Timely payments lead to an excellent CIBIL credit report, while delayed payments will reflect as red flags in the credit report..

Multiple Credits:

Multiple loans like home loans, personal loans, car loans, and credit cards can make lenders cautious. It is thus advisable to close one loan before applying for another to avoid negative impacts on your CIBIL credit score. Pay off existing loans to improve your credit report and avoid appearing credit-hungry to lenders.

Credit Utilization Ratio:

Lenders avoid extending credit to borrowers with a credit utilization ratio exceeding 35%. This ratio is crucial in assessing your repayment capacity based on income. Overspending on credit cards or any other forms of credit negatively impacts your CIBIL credit report and lowers your credit score.

How To Generate Your CIBIL Report?

Visit the CIBIL website:

To check your CIBIL Score, visit the official TransUnion CIBIL website, India's leading credit bureau. Look for the 'Get Your Free CIBIL Score' button, as they often provide one free report annually.

Provide Necessary Details:

Fill in the required information, including your full name, date of birth, address, and identification documents. Ensure accuracy to avoid discrepancies with official records.

Authenticate Your Identity:

To safeguard your data, the website may require an authentication process. You might need to answer a few questions about your credit history, so keep financial details accessible.

CIBIL Report Download:

Upon successful verification, you'll receive your CIBIL report via email.

In line with the Reserve Bank of India's mandate in 2017, every credit agency must offer one free credit report annually to consumers with a credit history. Post getting your first free credit report, you can take up a subscription option of one month (at Rs.550), six months (at Rs.800) or a year (at Rs.1200).

Reading Your CIBIL Report

To analyze a CIBIL report carefully, let’s comprehend the different elements of the report-

Credit Score:

The credit score, found at the beginning of your CIBIL Report, is a three-digit numeric representation of your credit history based on the Credit Information Report filed by lenders. It does not include details about savings, investments, or fixed deposits.

NA or NH Display:

If your credit score is shown as NA or NH while reading your CIBIL report, it could mean you have not yet established a credit history (e.g., for individuals who haven't started earning) or haven't had any credit activity in recent years, or have no credit cards or loans.

Personal Information:

This section includes your name, date of birth, gender, and identification numbers like PAN, passport number, and voter’s number, uploaded by lenders. Carefully review this information for accuracy.

Contact Information:

This section displays your addresses, phone numbers, and email address, uploaded by lenders. Verify the details and report any inaccuracies.

Employment Information:

This part covers your occupation, monthly and annual income details as reported by lenders during loan application.

Account Information:

This section provides details of your credit facilities, such as the name of the lending institutions, type of credit facilities, account numbers, date opened, date of last payment, loan amount, ownership details, current balance, and month-on-month payment records. Days Past Due (DPD) - the number of days an account's payment is due, will also be mentioned.

Enquiry Information:

This part reports the number of inquiries made by lenders in response to your credit/loan applications. Details include the lender’s name, type and size of the loan applied for, and application date.

Red Box:

A red box above the 'account details' table indicates any disputes related to account information and the dispute date. The red box is an alert message and will be closed once the dispute is resolved.

Correction In CIBIL Report

To avoid a drop in your credit score and improve loan or credit card approval chances, regularly check your CIBIL credit report for errors. If you find discrepancies, follow these steps:

• Fill out CIBIL online dispute form on its official website.
• Submit the form and the disputed field will be marked "Under Dispute."
• CIBIL will email the lending institution and notify you of the dispute's status.
• If accepted, they will correct your CIBIL credit report.
• The resolution time for disputes is around 30 days.

Conclusion:

Understanding your CIBIL report makes accessing and assessing your credit score and information easier. Spot errors and maintain a good credit score to fuel your financial requirements with personal loans. So if you are well prepared and ready to apply for a personal loan, get in touch with IIFL Finance to get your loan quickly and safely.

FAQs

Q1. How many months to generate CIBIL score?

Ans. CIBIL credit scores are calculated on the basis of the information in your credit report. You will need to have at least three to six months of credit activity recorded in that report before a credit score can be created. Simply put, it takes at least 6 months to generate a CIBIL score.

Q2. How to get a CIBIL report free of cost?

Ans. If you are registered with CIBIL, then you can access your CIBIL report for free by logging with your credentials. Many financial institutions also offer a free report on their website or app. You will be required to provide some of your basic information and there will be an OTP verification. 

Q3. How to download CIBIL report pdf for free?

Ans. In order to download your CIBIL report for free, you will have to create an account at https://www.cibil.com/ After logging in, you can check your score and download the report as well, for no extra cost.

Q4. How can I clear my CIBIL report?

Ans. In order to clear up your CIBIL credit report or remove the ‘Written Off’ status from your credit report, you will have to pay all the outstanding amount against your name. Once this part is completed, you will have to discuss with your lender and obtain a ‘No Due Certificate’. On submission of this certificate, your CIBIL report will be cleared off and you can start afresh.