A report that contains extensive information about an individual’s credit history which is checked and maintained by credit bureau is referred as a credit report. Credit bureau keeps a check on identifying information, credit accounts and loans, bankruptcies and late payments, and recent inquiries. It also provides a snapshot of your loan accounts and repayment track record. This credit report is used by the lenders to assess your creditworthiness.
A CIBIL (Credit Information Bureau of India Limited) report consists of six sections as mentioned:
CIBIL Score
CIBIL score plays a critical role in your loan approval process. A lender will always check your credit score before processing your loan application. It basically depicts the probable chances of you defaulting on your loan payment, based on your past credit usage and repayment record.
How credit score is calculated?
A credit score is derived from the “Accounts” and “Enquiry” section in your credit information. Credit score is a 3 digit number that ranges between 300 and 900. A score close to 900 is considered a good score. If you are applying for a loan, the chances of getting it improves if you have a high CIBIL score.
Personal Information
This section contains all personal information about you, such as your name, address, date of birth and gender. This information will be in accordance to the information provided by various lenders to your credit bureau. It will also show your income tax permanent account number (PAN), passport number, driving license number that you have reported to your lender.
Employment information
This section will contain your occupation and income (at the time of opening credit facility) as reported by your lender.
Account information
It is the most critical part of your credit report. It contains the details of all your loans and credit cards. It will have name of the lenders, types of current loans, whether it is a car loan, home loan or credit card etc. It will also have the account numbers, the mode of holding loan (single or joint), date of opening the account, date of last payment made, loan amount current balance and amount overdue (if any) and most importantly, a month-on-month record of up to 36 months of your payment history.
It will also show any collateral that you have against any loan and applicable interest rate for each loan you are using. In this section, there is a sub-section called Days Past Dues, which displays month-on-month record of the payments you have made. This section also provides information regarding your previous loans which was either settled or defaulted.
If there is a red band on the left of the report section, it indicates that the section is under dispute. The red ban will be removed after the dispute is closed. After the closure of the dispute, the disputed information may or may not be changed, as it will depend on the lender. The credit bureau can’t make any changes in the report on its own. The lender has to send the information to the credit bureau, if the dispute is right. After receiving it from the lender, credit bureau will make any changes. After the dispute is resolved the red band will be removed.
Enquiry Section
It is the last section in your credit report. It will have the name of the lenders those have enquired about you. It will have four columns – lender’s name, purpose of enquiry and number and date on which the enquiry was made. It will have two types of enquires, one a hard enquiry and other a soft enquiry. Enquiries by the lenders will be considered as hard enquiries and too many enquiries in a short span of time will portray you as credit hungry person and will negatively impact your credit score. Enquires made by you will be considered as soft enquires and will not have any impact on your credit score.
Read About: Factors that Affect Your Credit Score