CIBIL or Credit information bureau of India limited is the most popular credit information company in India. A cibil report is a record of your past credit history collected from different banks and financial institutions. CIBIL will also publish your score in your credit information report after analyzing your credit data with the help of of their proprietary algorithm. Credit score is the most important criteria used by banks to evaluate your loan application. But, it is observed that there have been large numbers of cases with problems and errors in cibil report. You should regularly update yourself regarding these problems so that you can improve your cibil for better deal on loans. Let us see different problems to answer how to correct cibil score-

1. Error in your CIBIL report – There can be numerous errors in your cibil report including spelling mistakes in your name or address. Other errors include case of mistaken identity where someone else’s loan is credited to your account or incorrect amount overdue on your existing accounts. This mistake can bring down your credit score without your notice. Let us see solution for these errors –

Solution – First step you should take is to download your cibil report from cibil’s website. You should clearly look for any errors in your cibil report. Once, any error is noticed you should raise a dispute with cibil by filling their resolution dispute form. After verifying your details, cibil will remove any applicable errors from your cibil report.

2. Days past due (DPD) – “Days past due” indicates that number of days your payment is past due date on that month. Anything above “000” DPD is seen in negative light by a bank or financial institution. Moreover, frequent late payments will result in lower score.

Solution – The best solution to it is to pay your EMIs on time and maintain a record of date of emi payments at your end. Other than that, you should avoid taking excessive credit on your name as it will limit your capacity of repayment of loan.

3. Bad credit history – A poor credit report with a poor score will seriously affects your future credit worthiness in eyes of the bank. Cibil is the first impression in front of bank and a poor score will seriously hamper your chances.

Solution –

•         Pay your credit card bills and emi of loans on time.
•         Do not rely on excessive debt for fulfilling your personal requirements.
•         Maintain a record of dates for emi due date or credit card payment date.
•         Check your score by downloading your credit history report from cibil’s website.
•         Converse with your bank or CIBIL regarding any wrong information mentioned in your credit report.

It is utmost important for you to maintain a good score for better terms in any loan negotiations. You can easily solve above mentioned errors and problems to improve your score. When it comes to cibil, always remember that a higher score is always a better score.

A cibil history is one of the most important criteria that bank or financial institution uses to do a credit appraisal of a loan application. A cibil score is developed by CIBIL ( Credit information bureau of India limited) by collecting and analyzing credit data provided by different banks and financial institutions over a period of time. Your cibil score can have values from 0, -1 and between 300 and 900. Let us analyze different cibil score and implications for you as a borrower –

1. “0” cibil history – A cibil score of zero means that borrower’s credit history is available upto period of only less than 6 months. It is also known as “non applicable” or “NA” in banking terminology. More often than not, this score is also treated in a same way as having no cibil score.
2. “-1” cibil history – This score indicates that no credit history is available for a borrower. This is also known as “NH” or “no history” in banking terminology. Banks usually don’t take an aggressive call on borrowers with “-1” cibil score. Hence, it is advised for a borrower to build his/her cibil history with the help of small loans and credit cards.
3. 300 to 550 – A cibil score in this range indicates that a borrower has been pretty poor in handling debts in the past. This cibil score indicates that borrower must have defaulted on his EMIs and there is a high probability of write offs in your cibil report. It is virtually impossible to get a loan from any bank or NBFC in this range and you have to rely on private lenders for your credit needs.
4. 550 to 650 – This cibil score is not considered a good score by most of the banks and NBFCs. Although, it is still better than a score between 300 and 500 but, you might have to explain reasons for having this score with genuine justifications to lender. You can still approach modern age lenders like peer to peer lending platform to fulfill your credit needs.
5. 650 to 750 – You are on the right path to achieve a financial nirvana. A score in this range is considered to be quite decent by most NBFCs and some banks. It is a perfect score to build your credit history to achieve above average cibil score. However, you still might have to wait for few point improvements in your cibil report to negotiate for better terms from financial institutions.
6. 750 to 900 – If your cibil score lies in this range then, you would be among most sought after borrowers for banks. Moreover, if your cibil score is above 800 by any chance then, you can negotiate for best terms on your loan proposal from a bank in terms of interest and tenure.

Your credit score is the most important criteria used by banks and financial institutions to assess creditworthiness of the borrower. When you apply for a loan in any bank, first thing that a bank checks about you is your score. At the initial stage, most of the applications are rejected by banks on the basis of cibil score. Given the importance of your score, everyone should know factors that affect your score. Let us see factors that affect your score-

1.    Multiple loans and credit cards – Having multiple secured or unsecured loans and credit cards may affect your credit score. This indicates that you are too much dependent on credit to fulfill your needs and expenses. Contrary to popular belief, closing your existing credit cards would also adversely affects your credit score as it increases your effective credit utilization rate.
2.    Delay in payments – Delay in payments of your past payments negatively affects your cibil credit history. It indicates that you were not careful about repayment of debts that you have taken in past. This is a red flag for most of the financial institutions if there are no genuine reasons for having this behavior. A default in payment should be avoided by a borrower at all cost to safeguard himself against any negative repercussion. Hence, it is very important to regularly monitor your loan accounts and make sure that no payment is missed.
3.    Increased credit limit – if you request for a increased credit limit on your credit card then, it will seriously damage your score as it indicates that you are too much dependent on outside credit.
4.    Not using credit card – Contrary to popular belief, not using your credit card will seriously affects your cibil credit history and it should be avoided at any cost.
5.    Not tracking your credit report – It is one of the most common mistake done by borrower community. It is often seen that, many times wrong information is found on individual’s credit report. Hence, you should regularly take out your cibil report from cibil’s website to make sure that any unnecessary information is not affecting your cibil credit history. It is advisable to check for your cibil report once a year.

Cibil rating is a credit information company which maintains record of individual’s debt and credit cards. CIBIL stands for credit information bureau of India limited. CIBIL is the most trusted authority that publishes credit information reports and cibil score that serves as an indicator for individual’s repaying capacity. But, over the years some myths have gained ground about cibil. Let us bust these myths one by one –

1. Low cibil score means no credit for lifetime – This is a common myth regarding cibil score going around for long time. No doubt, cibil score is one of the most important factor in loan appraisal at financial institutions but, different institutions have different credit policies. There are large number of institutions that don’t consider a low cibil score as no go area.
2. Cibil score maintains data of defaulters – CIBIL doesn’t maintain a record of defaulters with itself. It just collates information from different banks and financial institution and publishes it as it is.
3. Cibil rating is authorized to change credit report – CIBIL cannot change any individual’s cibil score or credit report unless approved by banks or financial institutions. CIBIL is only facilitate the process, this myth about cibil is one of the most damaging from borrower’s point of view.
4. Cibil score is affected by investments – A credit information report (CIR) is collection of records pertaining to only loans and credit cards. Cibil score doesn’t factor in any investments, saving account, fixed deposits etc for its calculations.
5. Cibil rating is the only decision criteria for banks – This is also one
   of the most common myths about cibil. No doubt, cibil score is one of the important criteria but banks also consider many other factors like business model, experience, banking records etc for credit appraisal purpose.
6. No Cibil score is ideal score – Banks look for a good repayment track records over the years. Some borrowers think that a no credit record would help them getting past cibil barrier but you should always know that a good cibil score is always better than a no cibil score.

Above list is an exhaustive representation of common cibil myths. But, as a serious borrower, you should always make out a difference between what is a myth and what is a fact. A cibil score is just reflection of your past behavior towards debt and it is in your hand to make sure that it always stay above 750 for better negotiations during credit appraisal process.

Credit utilization ratio stands for ratio of monthly outstanding payment from your credit card with numerator and credit limit provided on your credit card as denominator. For example, if your credit card limit is Rs 50,000 and monthly outstanding payment on this card is Rs 20,000 then, your credit utilization rate would be 40%. If you hold more than one credit card then, aggregate ratio would be calculated for all cards.

There is huge relation between credit utilization rate and cibil score.  It is estimated that credit utilization constitutes 30% of your overall cibil score. It is estimated that you should strive to maintain a credit utilization rate of under 30%. Before applying for a loan you can take help of online cibil score calculator to roughly estimate your cibil score. If your cibil score is not upto mark due to high credit utilization rate then, you can adopt following measures to safeguard yourself –

1. Increase limit on your existing card–You can reduce your credit utilization rate by increasing limit on your existing credit cards. Banks would be more than willing to increase your credit limit if you have been diligent in past towards credit card debt payment. This will decrease your credit utilization rate.
2. Get another card – You should also think about adding another credit card for yourself. This step will increase your total credit limit considerably without any considerable effort. A low credit utilization rate would automatically reflect in better cibil score.
3. Payment alert– Usually, credit card holders pay their outstanding credit card balance though auto debit from their account on specified date. But, you can set an manual alert for yourself twice a month to pay from your own account rather than auto debit. This will greatly reduce your credit utilization rate and hence will result in good cibil score.
4. Watch your behavior – You should check your credit card utilization frequently from time to time. You can check it regularly by logging in to your account and observing your past and current credit card behavior. By doing this, you prevent yourself from sudden high utilization rate that may impact your cibil score.

You can clearly see impact of credit utilization on your cibil score by going through calculations performed by any online cibil score calculator. Credit utilization is a major chunk of your cibil score calculations and you should take every measure to make sure that this aspect is not able to negatively impact your cibil score.

Cibil rating is one of the most important criteria used by banks and financial institutions to evaluate credit applications of the borrowers. Question must have come in your mind that what is cibil score? It is provided by CIBIL ( Credit information bureau of India limited) which was founded in 2000. Let us see some common FAQs associated with cibil score–

Q1. What is Cibil rating?

Ans. Cibil is the most popular credit rating agency in India. Cibil score is the score provided on credit information report (CIR) prepared by CIBIL. It is a 3 digit score that varies from 300 to 900, it is prepared by analyzing all the past credit information regarding loans and credit cards provided by banks. This score tells us about past repayment behavior and future repayment expectancy for a borrower.

Q2. What is an ideal Cibil score?

Ans. There is no ideal cibil score as different financial institutions have different lending criteria. But, a higher score is always a better score when it comes to cibil. Usually, you should always strive to maintain a score of above 750 to get the best deals on your loan application.

Q3. How can I get my Cibil score?

Ans. You can get your cibil score by visiting web for different subscription like one time, bi-annual, quarterly subscription etc to get your credit information report (CIR). Cibil will ask for your basic details like personal information, identity proofs, address information etc and provide your cibil score after authentication.

Q4. Will checking my Cibil score will have any negative impact?

Ans. It is suggested that you should check your cibil score once a year at least. By doing this, you will know your exact position for the purpose of loan. This is known as “soft check” in financial industry and enquiries by banks and NBFC are known as “hard check”. These enquiries if quite frequent will create a negative impact on your profile and will be seen as too much dependency on debt.

Q5. What are the things mentioned on credit information report (CIR)?

Ans. Your credit information report would mention your cibil score at the top. This score will vary from 300 and 900. Apart from this, your cibil report would also mention your information on personal, contact, employment, account and past enquiries etc. Your account information would mention all your previous credit details with important information like amount sanctioned, current balance, tenure, repayment track record etc.

CIBIL is the most popular credit rating agency in India. It stands for credit information bureau of India limited. Cibil carefully collects information from different lenders regarding loans and other advances and prepare a credit information report (CIR) and performs analysis of these data to prepare a separate cibil for each borrower. Cibil report provides information under various sections mentioning their specific details. Let us see what each of these sections contains individually to learn more about cibil score-

1. Personal information – This section provides your personal information like your name, date of birth, gender, identifying number (PAN number, voter id, passport no etc) to the lenders. You should carefully check this section for any disprencies in your cibil rating and correct them with cibil.
2. Contact information – Your address and telephone numbers are provided in this section. Upto 4 addresses are provided by cibil rating in this section.
3. Employment information – This section provides information regarding employers and income at the time of application for loan.
4. Account information – It is the most important section in your report from lender’s point of view. It contains all the details of credit facilities that you have availed ( home loan, auto loan, personal loan etc), account numbers, date of opening, date of last payment, current balance and record of last 3 years of your emi payment for different credit facilities that you have availed. This section on cibil score report would also mentions details about write off/settled/suit filed. Settled means partial payment in consent with the lender. A loan would be written off if, payments are not received for more than 180 days by banks.
5. Enquiry information – This section on your cibil score report would mentions your past loan applications. An “enquiry” means that a lending institution has enquired about you on cibil. Enquiry section would also include purpose of enquiry. A large number of enquiries on your cibil rating report would be seen as a negative thing by lenders as it indicates that you are seeking excessive credit.

For a borrower, it is utmost important to read his cibil report for sound decision making. More importantly, he should look out for any wrong data or information mentioned in cibil report. Careful investigation of account information would safeguard against any unexpected shock at the time of credit application.

Credit cards come with a limit attached to them. This limit is very crucial from consumer’s point of view. Most of the individuals are more than willing to increase their credit limit given a chance. Banks calculate your credit limit taking into various factors like your monthly income, your expenses and your repayment track record. Banks usually increases your credit limit depending upon your past repayment behavior and change in income. Let us look at pros and cons of increase credit limit and its impact on cibil score –

PROS

1. Lower credit utilization – A higher credit limit on your card will result in lower credit utilization rate on your credit card. A lower credit utilization will result in better cibil score as credit utilization rate is a major portion of cibil score calculation.
2. No need for for multiple cards – With one card of higher credit limit, you would not need multiple credit cards to manage from your own end. It will also save you from extra efforts to manage those cards.
3. Helpful in financial emergencies – in case of financial emergencies like sudden medical expenses a credit card with higher credit limit would always come handy. You need not rely on your relatives or friends in case of emergency with credit card of higher limit.
4. Better rewards – Banks tend to reward their higher limit credit card holders with better rewards compared to lower limit credit holders. So you can expect better deals on online shopping or movies next time with higher limit credit card.

CONS

1.    Reckless spending – A higher credit limit is a dream come true for most of the borrowers and it may result in unwanted shopping spree from a borrower on things that he may not have bought without higher credit limit. This reckless spending would negatively impact your cibil score due to higher credit utilization ratio.
2.    Security risk – In case of fraud or theft of credit card, damage to the owner could be pretty high compared to card with lower credit limit.
3.    Higher interest – A higher credit limit would result in higher credit expenditure which is more than what customer can afford to repay. Once, customer is unable to pay in current cycle, balance is carried forward to next cycle and you are liable to pay interest on it. This late payment may result in wrong habits and it would impact your cibil score negatively.

As, we can infer from above mentioned points that higher credit limit is good only for responsible buyers and for reckless buyers it would directly impact their cibil score and would increase their interest charges. Cibil score is between 300 and 900, you should always strive to maintain a cibil score of above 750 for better credit opportunities. You should make sure that higher credit limit doesn’t impact your cibil score adversely at any time.

Repayment of loan is one of the most troubling activity for a loan borrower. Initially, borrowers are excited to take a loan from a bank as it increases their bank balance enormously. Good score in India is one of the most crucial factors for a bank to disburse loan to a borrower. But, with time some borrowers are not able to regularly repay their loans. Given an opportunity, most of the borrowers want to repay their loans at one go or they want to foreclose their loan. Borrowers are not able ascertain impact of this behavior on their score.

Most of the borrowers think that by foreclosing their loans to banks, they would get good impact on their cibil score but, contrary to popular belief, foreclosing a loan impacts negatively on your cibil score.  When a bank sanctions you a loan amount then, a bank takes into account its asset liabilities management practices and prepare a amortization schedule that will generate interest for a optimal period of time. Due to foreclosure of loans, banks need to let go of large amount from their end and their calculations for your loan gets into toss. To compensate that, banks would charge a foreclosure charge from you for prepayment.

Banks would foreclose your loan on your request and payment. You may think that from now onwards your relationship with bank has closed but all this information would be updated in your cibil score. This information would be shared among all other banking and financial institutions. Good score in India is always considered to be above 750 in cibil records. Due to foreclosure, your cibil score might be affected in double digits in southwards direction and may take it below a score which is considered a good cibil score in India. Hence, a best practice would be to do a cost benefit analysis before foreclosing any loan in India. A cibil score is most important decision criteria for disbursing a loan and hence, you should take into account whether your future credit requirements would be effected by negative impact of foreclosing a loan and then take a decision accordingly.

Your cibil score is one of the most important criteria used by banks for your loan appraisal. Cibil score is a 3 digit score that varies between 300 and 900. It is a score that showcase your behavior towards past debts and how have you handled repayment of loan in the past. It is very important for an individual to get a cibil rating of his own to make sure that nothing wrong is mentioned on your report. You can easily get your cibil score from cibil’s website with a minimal fee payment.

There can be some information that are wrongly mentioned in your cibil report. There can be information that might not directly impact your cibil score like address, name, surname etc which might be wrongly mentioned in your report. It is very important to rectify these mistakes. In case, you find that some loan or credit card account credited to your account then, you should raise a dispute with cibil.

You can raise a dispute with cibil on their website by providing all relevant details that are required for dispute resolution. Cibil will share this data with banks and NBFC and they will check their records. The rating agency will resolve the dispute by getting the feedback from banks and financial institutions. This whole process may take a period of around 1 month to resolve. If your dispute is found to be genuine then it would be reflected in your updated cibil score.

Resolving a cibil dispute is very important as a bad cibil score would hamper your chances of getting a loan sanctioned from a financial institution. It is advised to know your credit from time to time and make sure that only right information is reflected in your cibil score.