The Credit Information Report and CIBIL score are used to analyze a person’s risk and make lending decisions when a loan application is presented to a major financial institution, bank, or investor. The CIBIL score is a moving target that changes over time. Better loan conditions, cheaper interest rates, longer repayment periods, new credit cards, and a wider selection of credit products, such as car loans, home loans, and insurance packages, are all available with a higher CIBIL score.
Credit report firms gather information about all borrowers from financial institutions and compile it into a report that details the borrower’s credit history. Personal information, accounts (owned by the company), and inquiries are all included in a credit report (for obtaining credit).
Let’s have a look at how to read and interpret a CIBIL credit report.
Credit score, personal information, contact information, employment information, account information, and enquiry information are the six sections of the CIBIL credit report.
The six divisions are described in depth further down. These CIBIL report components are as significant and serve a different purpose.
CIBIL Report Sections
Your three-digit CIBIL score is calculated using the information in your CIBIL report’s ‘Accounts’ and ‘Enquiries’ sections. The CIBIL score ranges from 300 to 900, with the highest value being 900. The higher your CIBIL score, the more likely you are to get into debt.
Higher CIBIL scores suggest that you are dependable and that the lender can count on you to pay back your loan on time.
This area provides personal information about you that has been provided to CIBIL by various members, such as your name, birth date, and gender. The identification type part contains information from lenders such as your permanent account number (PAN), passport number, driver’s license number, and voter ID number.
This section contains your contact information, including your address and phone numbers. There are a total of four addresses that can be stated. This section is a list of an individual’s many addresses, including their permanent address, temporary address, workplace address, and email address. This reflects the honesty of the candidate.
Information on Jobs
The employment information includes all of a person’s previous occupations and employers. They look at their employment history at those companies, as well as how frequently they have changed jobs. This assists the lender in determining how much money the client earns. When a person’s employment status changes frequently, it does not give the lender a good impression.
Your CIBIL account information is as follows:
Your account information reveals both your ability to repay debts and your risk of defaulting. Lenders carefully examine it to determine essential factors such as your monthly debt-to-burden ratio, loan repayment history, account status, and so on.
Information for your inquiry:
Recent credit application lender inquiries are listed in the Enquiry Information section. When you apply for a credit line, the lender will inquire about your credit history, and this information will be kept on file. This is where you’ll find a record of all the lender enquiries you’ve made, along with their purposes. If you request for a credit line multiple times, you will not only be denied, but you will also create a negative impression on the lender. This shows that you are in severe need of assistance.
Now that you’ve read about each item on your credit report, you may research and justify its significance. You can now browse your credit report without feeling perplexed. Check your CIBIL score on a regular basis to keep your scores consistent. Keep a check on your credit reports as well, and report any mistakes you find. If your CIBIl score is not up to the mark, you should research the tips on how to improve CIBIL score.