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 The ABCs of the CIBIL Report

The ABCs of the CIBIL Report

Every individual who has applied or is about to apply for a loan, must be aware of their CIBIL Score and Credit Information Report. The role of this report is highly vital to your loan being approved. Although, this is a known fact to many, what most of us fail to understand is – your CIBIL report does not decide if your loan is going to be approved or not. Here’s what you will be able to find out from your Credit Report:

 The CIBIL TransUnion Score is a three digit score that summarizes your credit history.

What does your credit history contain? 

It mainly reflects:

a.       Delay payments or defaults in the recent past.

b.      Extensive utilization of credit limits.

c.       If you have availed multiple loans and credit cards.

For every person who receives their CIBIL Report, it is important that they understand how to read through it so that they can be better informed on their credit activities. It is necessary for every individual to check their credit report periodically. The following are the various aspects found:

a.       The CIBIL TransUnion Score: A score on the scale of 900.

b.      Personal Information: Name, Age, Identification details (passport no, PAN no etc).

c.       Contact Information: Office Address, residential address and/or temporary address.

d.      Employment Information: income received on a monthly or yearly basis as reported by the banks

e.      Account Information: Your previous loan and credit card account numbers, bank names, important dates such as account opening, closing, overdue information and a month by month analysis of your emi and credit card payments.

f.        Enquiry Information: Information of your past and current loan application.

Your credit score is merely information presented as part of the credit information report. It allows the bank to analyze your previous credit history and come to a conclusion about your repaying capacity. This is precisely why the final decision on your loan approval is solely at the discretion of the lender Bank.

So, what can you do to improve your credit score? 

Improving your Credit Score will reflect in a positive credit history, this will always help in speeding up your entire loan application process. Here are some of the easy steps to follow to have an increased CIBIL Score:

I.  Always pay your emis and credit card bills on time. Never default or even settle your payments. Lenders view this negatively and will readily reject your application.

II.  Control your debt burden, control your credit utilization.

III. Not owning a credit card is not a good idea either, maintain a healthy mix of secured as well as unsecured loans and credit cards.

IV. Never apply for multiple loans and credit cards; this may make you seem more in need of money with an uncertain repaying capacity.

V.  Keep a tab on your joint accounts, and don’t be a guarantor or co-applicant for too many people.

VI. Review your credit reports at least once in a year.

Following the above mentioned best practices will definitely help you in gaining not only the loan amount you have applied; in fact you can even end up with reasonable interest rates irrespective of the type of loan you have applied for. To know more about the role cibil plays in your financial life, visit here

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