CIBIL is the repository of information which is pooled in from all Banks and lending Institutions operating in India. The Credit Information Companies (Regulation) Act, 2005, and various Rules and Regulations issued by Reserve Bank of India has empowered CIBIL to collect the data from various types of lenders and then share the same within the group. The legislation has enabled banks to submit data to CIBIL. This has enabled CIBIL to tracks repayment history of bank customers loans, credit cards and further banking finances.
For credit grantors to gain a complete picture of the payment history of a credit applicant, they must be able to gain access to the applicant's complete credit record that may be spread over different institutions. CIBIL collects company and consumer credit-related data and collates such data to create and distribute credit reports to Members.
CIBIL collects commercial and consumer credit-related data and collates such data to create and distribute credit reports to Members.(A Credit Information Report (CIR) is a factual record of a borrower's credit payment history compiled from information received from different credit grantors. Its purpose is to help credit grantors make informed lending decisions. CIBIL caters to both company and consumer segments. The Consumer Credit Bureau covers credit availed by individuals while the Company Credit Bureau covers credit availed by non-individuals such as partnership firms, proprietary concerns, private and public limited companies.
Today almost no loan or credit card application gets approved without checking the applicant's CIBIL report and CIBIL TransUnion Score.
CIBIL calculates an individual's credit score through advanced analytics and assigns a number between 300 and 900 to a borrower, based on his/her credit history. The closer your score to 900, the more confidence the credit institution will have in your ability to repay the loan and hence, the better the chances of your application getting approved. While each bank will have its own credit scoring cut-off based on the credit sanctioning policies, it has been observed that most banks are lending to consumers with a CIBIL TransUnion Score of 750 and above.
Credit information company has its own proprietary algorithm to calculate an individual's credit score, the most important elements of the score composition are centric around the loan payment behavior of the individual.
The score is calculated based on the following factors:
Various factors that impact the CIBIL Transunion Score:
CIBIL Report and CIBIL TransUnion Score not only determine whether or not you qualify for a loan, but it may also have an impact on the terms and conditions on which you can avail the loan. The higher the credit score, the better your chances of availing the loan faster and on favorable terms. It is advisable to check your CIBIL Report and CIBIL TransUnion Score before applying for a loan. Timely payments of loan EMIs is most important for maintaining a good credit history and a healthy credit score.
As CIBIL plays the role of the prime factor for your loan approval, it is very important in your financial journey.
A CIBIL report plays a prominent role in an individual’s financial journey. The lenders depend on your CIBIL report to verify an individual’s creditworthiness. The main purpose of a CIBIL Report is that it aids the lender as well as the borrower in identifying and understanding their credit history clearly and completely.
Credit scoring is a complex calculation, and the more you know about how credit reports and credit scores work, the better you can take control of your own credit. In addition to knowing the most important factors considered in credit scoring, it can be helpful to know a few other facts about credit reports and credit scores.
These are a few things that tend to be most important: