CIBIL Facts

CIBIL is India’s First Credit Information Company or Credit Bureau. It maintains all the records of individuals and companies of their CREDIT-RELATED ACTIVITY including Secured, unsecure or Term loans.

CIBIL was founded in 2000 to bring greater efficiency and transparency in credit space. TransUnion International (a global credit bureau) and Dun and Bradstreet (a global provider of credit information) are technical partners of CIBIL in India.

CIBIL only provides a quick, reliable and efficient database of credit information to financial institutions and help them in making lending decisions to end users.

CIBIL score reflects the credibility and borrowing capacity of the individual or the company. It ranges 300-900. The CIBIL score is generally considered good if it ranges in between 650-900. The score below 650 is generally considered bad.

HOW CIBIL SCORE IS AFFECTED POINT WISE

1. APPLIED FOR THE LOAN (EACH ENQUIRY) 15 POINTS WILL BE DEDUCTED

2. FOR CIBIL SCORE CHECK 15 POINTS DEDUCTED

3. LOAN APPLICATION ACCEPTED OR DECLINED 25 POINTS DEDUCTED

4. SECURED/UNSECURED LOAN PAYMENT CHEQUE BOUNCE 20 POINTS DEDUCTED

5. CREDIT CARD PAYMENTS PAID REGULARLY 10 POINTS ADDED

6. UNSECURED LOAN PAYMENT MADE/ECS CLEARANCE 15 POINTS ADDED

7. SECURED LOAN PAYMENTS 15 POINTS AE ADDED

8. DELAY PAYMENTS DUES (DPDS) MORE THAN 90 DAYS VERY DANGER.

9. SOMETIMES SUB IS SHOWN IN CIBIL REPORT MEANING ABSCONDING/PAYMENTS NOT MADE.

10. SOMETIMES STD IS SHOWN IN CIBIL REPORT MEANING SETTLEMENT

WAYS TO IMPROVE CIBIL SCORE:

1. CHECK ALL COMPONENTS once you receive a credit report. If you find any fault in the report like, the amount completely paid or loan was closed long back and it is still reflecting in the report, or any loan is reflecting that you have not taken, then you can file dispute, which definitely and immediately will improve the CIBIL score.

2. PAY ALL YOUR BILLS ON TIME including loan EMIs, credit card bills on time and full. Missed and late payment will adversely affect the score.

3. NEVER EXCEED 50% OF YOUR CREDIT LIMIT.

4. APPLYING FOR MULTIPLE LOANS OR CREDIT CARDS will affect the CIBIL SCORE. There should be a healthy combination of 1 or 2 cards along with a secured or unsecured loan.

5. Written off or Settled components or labels will significantly affect the CIBIL SCORE. Instead they should be converted to “CLOSED” labels/status. Delay and postponement of card payments always comes with a cost. Having a CLOSED status improves the credit health and eventually THE CIBIL SCORE.

6. Due to administrative errors in NAME, PAN CARD, GENDER OR AGE, a DEFAULT label will appear in the CIBIL report. Or you could also be a victim or identity theft. Then in these cases we will have to file a dispute with the CREDIT Bureau with all the evidences of loan closing NOCs or fully paid receipts etc. to be sent along with complaint. It will usually take 30-45 days to reflect in the CREDIT REPORT.