5 Facts About CIBIL Report You Did Not Know
Your Credit Information Bureau of India Limited (CIBIL) or Credit Information Report (CIR) contains all information that is necessary to ascertain your financial standing, credit history and worthiness. It is your loan's health report.
CIBIL report is becoming an indispensable part of home loan buyers' lives. So, it is being considered a crucial part of financial planning and in getting access to credit more easily.
The CIBIL report, however, is not an exhaustive report. There are a few things that your CIBIL report do not tell you, but such facts can be inferred from the details in your report.
MakaaniQ tells more about the hidden facts in the CIBIL report.
- The CIBIL report does not say if the score should be considered for credit assessment or not: Your credit score and status are based on your credit history. But the report does not tell anywhere if the credit/CIBIL score must be considered for home loan assessment. That decision is left to the discretion of your lender. The CIBIL report will not tell you whether you will be granted a loan or not. It will only give a picture of how well you have handled liabilities in the past. The report tracks loans and credit cards over a certain period, and based on this, inferences are drawn. For example, even if your CIBIL score is high, if your CIBIL report reflects a home loan in the past which shows over dues, the lender may not consider your home loan application for approval.
- The CIBIL report does not give suggestions or measures: The CIBIL report does reflect details on defaults, over dues, delayed payments etc. but it never provides measures or suggestions on how you can improve your CIBIL score. The CIBIL report does not tell you corrective steps that you must undertake to improve your chances while applying for the next home or mortgage loan. Whether you should close a certain number of credit cards, pay the outstanding loan account, or settle the disputed loan amount is something you need to understand and fix.
- The CIBIL report does not reflect credit utilisation ratio: Credit utilisation ratio is calculated by comparing an individual's total debt/ credit balance to the total available credit (i.e. credit usage to credit limit). Your CIBIL report will not calculate this ratio for you. That is something left to the user (like lender or a credit card company) to estimate. Roughly, 30 per cent of your overall credit score is influenced by your credit utilisation ratio.
- The CIBIL does not list the names of defaulters: Many home loan borrowers feel that the CIBIL maintains a list of defaulters. This not so. The CIBIL report does not show something as 'Default list'. Lenders do not have any access to a CIBIL report that blacklists you as a defaulter on the past credit. The CIBIL report only records the default details that can affect your score negatively. CIBIL does not have a database of defaulter's list.
- The CIBIL report does not reflect the reason for settlements or closing of accounts: The CIBIL report does not reflect the reason for settlement or closing of accounts. You may have not been able to make equated monthly instalments (EMIs) due to very genuine reasons, and this may have prompted you to settle an account. But, these details are not highlighted by the CIBIL in your report. Your CIBIL report will only show that an account was settled. It is the responsibility of the loan officer to probe the reason for settlement during a personal discussion with you while appraising your home loan application.