Founded in August 2000, the Credit Information Bureau (India) Limited is India’s first Credit Information Company (CIC). It is one of the 1000 companies in the globe to have achieved the ISO 27001 certification, and amongst the first few in India. Post its inception, CIBIL products have given rise to a vast difference in the way credit life is interpreted by both consumers and loan providers.
The CIBIL operates through 2 major divisions- the Consumer Bureau and the Commercial Bureau. The former maintains credit records of individuals while the latter maintains credit records of companies/institutions.
The CIBIL amasses and maintains records of an individual’s payments pertinent to his loans and credit cards. The registered member banks and credit institutions submit client records on a monthly basis to the CIBIL. This data-rich information is used to create Credit Reports and Credit Scores – arrived at by applying a complex mathematical algorithm to an individual’s borrowing and payment patterns.
A CIBIL score ranges from 300 to 900. In case of a loan application, banks and lending institutions inquire into one’s credit record by requesting a score from the CIBIL. The lower the credit score, the riskier the lender feels it is to lend an individual money, and the higher interest rate it tends to charge if it is opting to approve one’s loan request at all. Generally, a CIBIL score above 750 is considered ideal to extend a line of credit to an individual.