Are you someone who is curious to know your credit score before applying for a loan or your favourite credit card? If yes, reading this article is going to be worth for you. Many people at the time of applying for a loan or a credit card pay much attention to the credit score and why not, it is undoubtedly one such crucial ingredient without which it is difficult for an individual to experience a smooth financial journey.
However, just like your credit score, there is another vital element that plays a key role in your overall loan journey, any guesses? Well, it is your CIBIL report. You read that right, my buddy! This report not only showcases your score but it includes a lot more information. So, without wasting any time further, let’s just get into the topic straight and discuss more of the same in the article below.
When it comes to CIBIL report, there is no denying the fact that it is a comprehensive unified document that not only contains the credit history across different lenders over a significant period of time but it also includes the details of an individual’s/corporate entity’s borrowing history and repayment record. Basically, this report includes the following:
The personal details of an individual such as Name, Age, Gender and Address
Employment Details and Total Earnings
Total number of hard inquiries made by the potential lenders on the receipt of a loan/credit card application
Previous and current loan records along with payment record
Defaults on loan/credit card (if any)
Total credit limit and monthly spend limit (credit utilization ratio)
Moreover, with the help of this report, it becomes easy for the lenders to know the detailed information of an applicant’s creditworthiness on the basis of previous and current credit behaviour. After looking at the report and getting fully satisfied with the same, the lenders take their final decision. Now that you know the information this unified document usually contains, let’s just know how this report has been generated.
How is CIBIL Report Generated?
India’s first Credit Information Company known as Credit Information Bureau of India Limited Limited (CIBIL) is one such renowned agency that maintains and collects the records of all the individuals and non-individuals who has ever been involved in any credit-related transaction such as loan/credit card. This reputed company collects the records from numerous leading banking and NBFCs on a monthly basis. If we talk about the data, it includes new loan/credit card application, credit limit, interest rates, status of all applications, defaults or what not. The lenders always keep an eye on the financial history of an individual and after considering the above parameters, a detailed Credit Information Report (CIR) has been generated that also has a credit score. Now, you can say this detailed report is a gateway of an individual creditworthiness and after the deep analysis of the same, the lenders evaluate and approve the loan/credit applications.
However, one thing that needs to be mentioned here is the fact that if your report says that your credit score is poor, it would be a big problem for you as due to which you won’t be able to get the lucrative deal for a loan/credit card. That’s Right! If an individual is having a low score, he/she tries to improve the same by keeping certain key points in mind. And, if a person’s score is good, he/she ensures that it should always remain good, i.e. maintaining a good score is also an important practice that also required the much-needed attention.
If you pay all your bills/dues on time without a miss, if you maintain a healthy relationship with your lender/credit card issuer, if you don’t check your score on a regular basis and if you avoid applying for a loan/credit card at too many lenders are some of the key practices that one should always follow so that it not only helps in improving/maintaining a good score but the same will also reflect in the CIBIL report, which will work in the favour of an individual for his/her future loan/credit needs.