What is a Cibil Report? - Types, Uses and How to Read It

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When you apply for a new line of credit to a traditional financial institution or an NBFC, the lender will run a comprehensive check on your past repayment history to determine whether you are a high-risk borrower.

That is why the CIBIL report becomes a crucial testament to your creditworthiness.

The detailed report on your credit behaviour maintained by the Credit Information Bureau (India) Limited is referred to as the CIBIL report. Being arguably the most reliable credit bureau in the nation, this Credit Information Report or CIR plays a pivotal role in determining whether a potential lender will sanction your application for credit disbursal.

Whether you are applying for a secured or unsecured line of credit, your CIBIL report possesses immense importance because of a number of reasons:

Risk Assessment Tool for the Lenders

This report contains all the crucial identification proofs of a potential borrower, such as his or her passport details and account number. As these details are verified by the financial institutions from which CIBIL gathers its data, a potential lender can rest assured about the legibility of a borrower.

Ability to Flag Credit Hungry Behaviour of a Borrower

When you submit a credit application to a financial institution, it will automatically generate a formal inquiry about your credit records. When a bank or NBFC pulls up these documents about your profile, it is referred to as a hard inquiry.

Details of how many such inquiries have been made about you will also be recorded in your credit information report. Multiple hard inquiries made within a shorter period of time can have a detrimental effect on your credit profile. This way, when reviewing your CIR, a lender can label you as a credit-hungry borrower.

Enables You to Build a Reputational Collateral

Economic experts suggest that you should keep a tab on your CIBIL report to ensure your financial health can continue to improve over time. If you have the proper understanding, routinely checking this report will give you an overall idea about your spending habits, need for debt consolidation, and the economic objectives.

As a result, if you can properly take control of your financial standing, such positive aspects will be likewise reflected in your credit information report. Taking measures such as paying EMIs on time and restricting your credit utilisation ratio can improve your credit profile exponentially.

Impacts Your CIBIL Score

As your repayment behaviour, as recorded in the credit information report, determines your creditworthiness, it will subsequently factor in deciding your credit score. The leading financial institutions of the country consider a score of 750 or above to be ideal for a borrower looking to avail of a new loan. So, if your credit profile is reflected positively in the CIBIL report, your credit score will improve accordingly.

A higher credit score not only increases the chances of your credit application getting approved but also may lead to lenient lending terms

Please note that you can avail of your CIBIL report online without any additional burden. Routinely checking this report is crucial to ensure there are not any erroneous details in the records that can affect your creditworthiness adversely.

For instance, you will need to check whether the information about your availed credits has been adequately represented. Ensure that there are no wrongful ‘settled’ or ‘written off’ labels for your account status, as that can jeopardise the chances of you receiving a loan. Moreover, note that tags other than 000 or STD for the Days Past Due for a loan mentioned in the CIR are also not ideal.

A stepwise procedure of how to read your CIBIL report has been described below:

Step 1: Navigate to the official website of TransUnion CIBIL.

Step 2: Click on the tab “Get Free CIBIL Score and Report.”

Step 3: Provide all your crucial details on the form displayed.

Step 4: Submit this form and complete your verification procedure.

Step 5: Log into your account using the CIBIL credentials as set up during the form fill-up procedure.

Step 6: Go to the dashboard of this website.

Step 7: Click on the link “Check CIBIL Score.”

Step 8: Select the option “View My Report.”

Step 9: Subsequently, your CIBIL report will be displayed to you.

Step 10: Moreover, if you want to download or get a hard copy of this report, you can opt for the “Print Report” option available on this portal.

TransUnion CIBIL generates two specific kinds of credit reports for the borrowing entities:

• Credit Information Report: Issued to individuals, denoting their credit activities
• Credit Commercial Report: Issued to a company, recording its business loan repayment history and overall financial health

As it can be understood from this discussion, the CIBIL report is the cornerstone of a streamlined loan application sanction and fund disbursal procedure. On the one hand, lenders can refer to this report to mitigate getting in business with potentially delinquent borrowers.

Alternatively, as an applicant, you can also use a higher CIBIL score to ensure that you can avail yourself of the most beneficial lending terms that are in line with your financial goals. However, if you spot any errors in the recorded data, it is quintessential to raise this issue to the respective authorities.

When you are reviewing your credit report, you must keep an eye out for these possible areas of wrong information being documented:

• Your personal details are not shown accurately
• The description refers to the wrong loan account in question
• The amount of outstanding date does not match the actual calculation
• Assigned credit limit is not proper
• Your account status is incorrect
• The repayment pattern you follow is not reported correctly

If you have spotted any factual errors after checking your CIBIL report online, you can follow the steps as mentioned below to resolve this issue:

Step 1: Open the official website of CIBIL.

Step 2: Navigate to the Dispute Resolution Area of this site.

Step 3: Open the online dispute resolution form.

Step 4: Enter your personal details in this form.

Step 5: Provide necessary details about the mistakes present in your CIBIL report.

Step 6: Write down the nine-digit control number as provided in your credit information report

Step 7: Click on the “Submit” button displayed on your screen

Correspondence With Your Lenders to Corroborate the Claims You Made

It is also pivotal to note that CIBIL authorities will be corresponding with the lending institutions with whom you had lines of credit opened. Therefore, the areas of dispute you have claimed will only be updated in this report if these financial institutions verify your claims.

The rules and regulations in place in this regard mandate that a bank will need to provide a comprehensive resolution to a claim of dispute within 45 days of you raising the issue. Therefore, if you are looking to further expedite the claim verification procedure, you can consider submitting adequate documents of proof alongside the dispute resolution form. This way, your claims can be legally substantiated.

Amendment by CIBIL of Your Credit Report as per the Disputes Claimed

Once you have filled out this form, it remains the responsibility of the authorities of CIBIL to get in touch with you with an update regarding the same. However, please keep in mind that it takes around the span of a month for the credit bureau to update the corrected information.

Notification from CIBIL About the Modifications Made

Once the changes have been made, you will be receiving this updated CIBIL report via mail. However, if this modified report still contains any erroneous details, you can further submit a new request to the bureau about removing these wrong entries. However, please keep in mind that you will have to offer the necessary details of the previously filed dispute request along with this new one.

Suffice it to say this CIBIL report is the primary document your potential lenders will be reviewing once you have applied for a line of credit. Therefore, it is essential to maintain the financial disciplines to make sure a loan application does not get rejected. A credit application rejection can bring down your CIBIL score significantly, jeopardising any scope of newer loan approval. So, when you download this report, ensure all the details are presented there correctly.