A long-pending demand of the public has been met. A look at what CIBIL provides in its credit information by our finance expert R. P. Deshpande
The Credit Information Bureau (India) Ltd., popularly known as CIBIL has acceded to the long-pending demand of general public to have direct access to their personal credit score, which hitherto was the domain of only lending institutions.
CIBIL is a storage house of credit information of individuals and commercial establishments. It collects credit information of consumers and commercial establishments from its members, then collates the information and circulates it back to its members, on request. The members are banks, financial institutions, housing finance companies, credit card issuing companies and other lending institutions.
CIBIL provides the information of consumers in a format called CIR (Credit Information Report), which contains details of all credit facilities availed by the borrower, past payment history, amount overdue, inquiries made by the borrower with different lenders (banks and other lending organisations), suit-filed status etc. In the recent times,
CIRs have a significant say in loan processing and have become an important tool in the hands of loan-sanctioning authorities.
The credit score, called CIBIL TransUnion Score, is the summary of the CIR, expressed in terms of numerical figure. The score is arrived at by analysing the details available in the CIR, and varies between 300 and 900.
The credit score indicates how likely the loan aspirant would pay back the loan, basing on the past pattern of credit usage and loan repayment history. Higher the credit score, higher the comfort level for credit approval.
How to obtain CIR and Credit Score
You can have your CIR directly from CIBIL for a fee of Rs. 142 and for CIR with Credit Score, the fee charged is Rs. 450. You can fill the request form (online) on the website of CIBIL (www.cibil.com), upload the scan copies (self-attested) of approved documents of your identity proof and residence proof and pay the requisite fees via net-banking.
The documents approved for identity proof are PAN card/passport/voter ID. For residence proof, the documents can be latest bank statement/electricity bill/, telephone bill/passport/credit card statement.
On completing the transaction, you will receive a unique CIBIL registration ID and transaction ID in your Online Payment Confirmation. You will also receive confirmation on your e-mail. You need to take hard copies of all documents uploaded and send the entire set to CIBIL at any one of the office addresses provided in the website of CIBIL.
Alternatively you can download the requisition form from the website of CIBIL, and fill it completely. You need to purchase a Demand Draft (DD) favouring ‘Credit Information Bureau (India) Ltd.' payable at Mumbai for requisite fees (Rs. 142 for CIR or Rs. 450 for CIR along with CIBIL TransUnion Score).
You need to dispatch the filled application, DD, along with self-attested copies of identity proof and residence proof to CIBIL at one of the addresses given in the website.
On verification of documents and receiving the fees, CIBIL will dispatch your CIBIL Report along with instructions on how to understand the report. However, on receiving your CIBIL report, if you require any explanation/clarification, you can e-mail to email@example.com quoting your CIR number, or call Ph: 022-61404300.
How credit-scoring is done
There are four major factors on which your credit score is calculated, such as your repayment history, utilisation of credit facilities, concentration of higher unsecured loans and inquiries made at various lenders for credit facilities.
Your payment history has a significant impact on your score. If your repayment tracks on all existing loans are regular, you would be awarded higher marks and if you have missed or delayed repayments on any of your existing loans, over the last two years, your score is likely to be much less.
Price of indiscipline
If you are using credit card, overdraft facilities etc., diligently and making payments regularly without keeping higher outstanding amounts, your score would be higher. Indiscipline in utilising credit facilities and higher utilisation of credit facilities will lead to much lesser score.
In your loan portfolio, if you have more secured loans such as home loan and auto loan, which are normally need-based, it is favourable for getting higher score.
On the other hand, if you have more unsecured loans such as personal loan, consumer loan and credit card limits, it is likely that you would get much lesser score.
If you have approached many lenders for various credit facilities in the recent past, whether you have availed yourself of those facilities, or such applications were rejected or pending, , such information leads to negative scoring.
(The author is the Director of Institute of Home Finance and can be contacted at firstname.lastname@example.org )