Date: July 16, 2016
Know What is CIBIL and how is it Calculated. How to get Free CIBIL Score including a Good or Bad Score. Tips to Improve Credit Rating
CIBIL full form is Credit Information Bureau (India) Limited.
CIBIL is an Autonomous Body which collects Information from all Banks, NBFC based on Individual PAN Card, Date of Birth, Address about loan and credit card repayments, inquiries for loan, Overdrafts and generate Credit Scoring based on above
This is also known as Credit Scoring which signifies that how well have you repaid your previous loans and credit card obligations in the past basis which you get a score. Basically, CIBIL match signifies your repayment pattern - i.e
» How many Loans and Credit Cards do you have
» What is the repayment behavior (Bounces or all payments done on time)
» When were these Loans, Credit Cards, Overdraft taken with Outstanding amount
» How many Loan Inquiries been done in the past
» Any Address and Mobile Number if changed or remained same in all applications
» Any Loan settlements, Write Off, EMI Outstanding, Minimum Amount Paid, Overdues are all reflected through CIBIL
and through all this - CIBIL generates a Credit Rating Score of the Individual
Important: CIBIL stores a database basis Applicant Name, PAN Number, Date of Birth. Even if a person changes his Address - still the data matches with Applicant Name & Pan number and the entire report is generated
There are 2 ways to check Credit Score, with a Free way to check CIBIL Score too
a) Visiting CIBIL Official Site, completing there Online request form, making online payment of Rs. 550 as charges for generating your Credit Report, post which you need to authenticate details by submitting some personal information related to PAN Number, Address, Pin code, Loans Taken etc and you can get your Online Credit Report in couple of minutes.
However, if the information furnished becomes mis-match - you need to courier in the copy of your PAN and latest address proof along with Payment acknowledgement ID to there correspondence address in Mumbai and they will send you the hard copy of report post receipt of details.
b) Another way (though not recommended for Free CIBIL Score) is you can put a loan or Credit Card application in Bank. If the loan application passed on or gets through - you can safely consider your application or credit rating well in norms (Banks do not charge any processing fees for submitting a car loan application).
If, however - there is an issue or a problem in your Credit report - you can get intimation from respective bank for seeking further clarification or even rejection. Through this process - you may though not get to know about your exact Score or Rating, but what you can surely know is - whether your Credit Rating is meeting norms of bank for lending or not and what is the issue like. This may not charge you a single penny. (Caution - Do not put multiple application as it will start showing in CIBIL that you are seeking loan from multiple banks and may hinder your borrowing capacity)
A Banker can determine your CIBIL Rating by following the basic general guideline for a Good or Bad CIBIL Score
|-1||Insufficient history to determine your Credit Rating. Generally, for the first time takers who have never ever applied for loan|
|Less than 620||Bad Credit History. In Bank Definition, high Probability of been called as Defaulter. Need to Re-work completely by understanding Profile, Income Level, Past Repayments to increase Credit Score|
|620 - 700||Below Average CIBIL Score, Certain Payments were delayed for long. On Verge of Entering into Defaulter Zone|
|700 - 720||CIBIL Potentially can have an Issue with either some payments in past were delayed or recently got into too many loans|
|720 - 740||Average Credit Rating History. Had couple of delayed payments, but were paid on time. Overall can be considered for loan|
|740 - 750||Above Average Credit Rating. Most of the payments are on time|
|750 and above||Good Credit Score, with some long clean repayments|
|780 and above||Excellent Credit Rating, On Time Payments. Not over leveraged, Seasoned History Best|
* - Basis Writer Experience and Personal Judgement
Note:- Credit Report is Internal Report of Bank on which they score applicants on Positives and Deviations. Like CIBIL Score, Field Verification Reports, Income Eligibility, Bank Statement Average Balance and Previous Relationship or any other factor to assess the profile of the Applicant.
While CIBIL only reflects a scoring basis the repayment track track record on Secured and Unsecured Loans. It does not consider Income, Eligibility or Verification reports in any sense.
Keep yourself in shoes of banker and know what more details one need :-
- Reason of Default - was it intentional, financial or some dispute with the bank
- Were bounces were regular or only for specific period - The Banker would like to extract details of your repayment loan track record basis the report. Were the loan EMI's been bounced regularly or only for a specific period
- Time Taken to Repay the Instalments - how much Time taken by you to clear off your bounced installments
- Settlement Reason - Cause of settlement and amount. Which product you had settlement into. If its a Car Loan, Home Loan or Personal Loan - it has a much bigger impact compared to a credit card settlement
- Other Loan Details - If the issue due to which default has happened and caused bad cibil score - do you have ever taken any other loan apart from it previously. If yes, hows the repayment track record of that loan
Read this article post on Detailed Process on - How to Improve CIBIL Score
Keeping above factors into consideration - if you had a bad Score but due to circumstance - you can put your point with the Banker - its possible that with collateral basis FD of close to 70% of loan amount or with a Guarantor with 50% of FD Amount - Bank can give you an opportunity to take a loan and improve your bad credit by making timely payments
If there is a dispute with a Bank or Financial Institution - you can still relax as, if you have documentary proof with communication details - you can furnish these documents to your prospective lender and can prove that issue has happened from Financial Institution end. Also, you can simultaneously pursure your case against erring Bank with the Banking Ombudsman - which is Judicial Authority appointed by RBI for benefit of consumers to file there cases against erring banks.
If it was an Intentional default - then Banks are not going to finance - You may contact Private Lenders - if get a chance to get loan - who charge 24%-40% ROI with a guarantor
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