Credit information companies (CICs) are independent third-party organizations that gather financial information about loans and credit cards and communicate it thoroughly with their members. There are four CICs currently in India: CRIF High Mark Credit Information Services, Experian India, Equifax Credit Information Services Pvt Ltd, and TransUnion CIBIL Ltd (CIBIL). Financial institutes like banks and NBFCs (Non-banking companies) are members-subscribers of CICs. They collect information about all borrowers from financial institutes and then convert this into a report detailing the credit history of the borrower. By paying a set sum to any of the four CICs in India, individuals can receive their own credit report, which includes their credit score and history.
For those who don’t know, keeping the Transunion cibil score or any score of any other CICs high is very important. Your CIBIL score or CRIF credit report affects everything, including your ability to get a credit card or loan, so it’s critical that it’s computed and reported accurately. The three-digit credit score, which ranges from 300 to 900, with 900 being the best, is calculated by CICs. Your eligibility for a loan and the interest rate you will pay to depend on your credit score.
What exactly does a credit report contain?
For the unversed, it contains information in sections including personal data, accounts (owned by the entity), and inquiries made (for obtaining credit). However, this CRIF credit report does not include facts about savings accounts, debit card transactions, investments like mutual funds, stocks, insurance, or utility bill payments.
How to read it like a pro?
Now let’s examine how to read a CIBIL report and comprehend one. Transunion CIBIL score, personal information, contact information, employment information, account information, and enquiry information are the six sections that make up the CIBIL credit report. Each of the six divisions (which are listed below) serves a different purpose and is equally significant.
TransUnion CIBIL Score: This is the first section of the report. Lenders evaluate a person’s score, which can range from 300 to 900, to determine whether or not to extend a loan to the applicant. Of course, the better your score, the more likely it is that lenders will approve your application. The percentage of applicants who received loans in the previous year, according to the band they fell under, is also shown in this section. But do you know what it signifies when the score isn’t always between 300 and 900? NA or NH indicates that you are either new to the credit system or have no credit history. Additionally, it implies that either you haven’t used credit recently or you have no credit exposure.
Personal, contact, and employment data: Three different headings are used to present this information. This is quite straightforward; the personal information portion contains data that lenders have provided to CIBIL. Name, birthdate, PAN number, passport information, voter ID, and driver’s licence information are all listed here. Any detail that has the letter “e” next to it has been provided by the lender, as indicated. The lender-provided contact information includes up to four addresses (permanent/temporary/office), the person’s email address, and their phone number. Your employment and income information is provided in part titled “Employment Information” when you apply for credit. Therefore, this may differ if there are two distinct loans. Just check this part to ensure that the information mentioned is accurate.
Account Information: This is unquestionably the most crucial section of your CRIF credit report. This includes details about all of your open loans and credit cards. Information about the lender, the type of credit (home loan, auto loan, credit card, etc.), the date the account was opened, the date of the most recent payment, whether the account is held solely by one person or jointly, the amount of the loan, the amount that is past due (if any), the total amount owed, and 36-month payment history. A red border around the information suggests that it is subject to disagreement. Depending on the lender’s response after receiving a letter clarifying the circumstances, the material may or may not be removed. This section basically sums up your open debt and gives you an accurate picture of your debt situation. Hence, go through it carefully to find out about any lapses that may occur on your or your lender’s part and resolve the disputes ASAP.
Any financial institution’s inquiry into your credit score is included under this heading. Here, specifics, including the date, the name of the lending institution, the requested loan amount, and its type, are indicated. This affects your final TransUnion CIBIL score or the score of any other CICs well. Only hard inquiries (those conducted by financial institutions) are included here; soft inquiries (those conducted by an individual to determine his own score) are not.
In the meantime, the phrases listed below can aid you in better comprehending your CRIF credit report.
Days Past Due (DPD): It is a measure of how many days the past due payment is for a certain month. Zero “000” or More Than Standard (STD) is considered negative.
CN: If you want to file a dispute, use this Control Number, which was mentioned at the start of the report.
Settlement Amount: If a loan or credit card payment is written off, the borrower and the lender may come to an agreement on a sum that the borrower will be responsible for paying; the lender will write off the remaining balance. Remember that a loan amount that has been written off indicates that the lender has given up on trying to collect it from the borrower. The lender may write off the principal or the complete amount (principal plus interest).
Written Off Amount: The amount that is left over after the customer and the lender agree on a settlement amount is referred to as the written-off amount.
NPA (Non-Performing Asset): These are payments that have been past due for more than 90 days.
Amount Overdue: This shows the entire sum that has not been timely paid to the lender (includes principal and interest amount).
High Credit: It refers to credit cards and overdrafts and is the total amount ever charged (interest and fees included) for that credit card or overdraft.
Written Off and Settled Status: If this field is filled in, your lender has either restructured your loan to give you better terms (such as a longer loan term or a lower interest rate), written off this amount, or reached a settlement.
You must know there is much more to your CIBIL report than it reflects. It is true for most of us to only pay attention to the TransUnion CIBIL score, but we must understand a CIBIL report contains much more information. Your TransUnion CIBIL score is a crucial factor that lenders take into account before approving your loan application. Additionally, the CIBIL score offers crucial information about your credit history by analyzing prior credit utilization and loan repayment habits.