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Decoding CIBIL Credit Report

Wednesday, August 07, 2013 by Rajiv Raj

cr114n14Imagine that you are giving an important exam. Would you not like to know the pattern in which the exam paper is set? What are the marks allotted to each question? Which of the topics are more important and require extra attention while studying?  On what basis will the examiner mark you? Is there negative marking.for instance?  Similarly we need to understand the CIBIL report to figure out where the score can be improved.

CIBIL's Transunion score is a three digit number that the equivalent to marks that you get in an exam. Often due to blunders and ignorance, your credit score can be very poor. Luckily, the score can be improved and CIBIL regularly re-examines the elements of credit report and adjusts the credit score to reflect it. So if you are looking to improve your CIBIL score you need to understand the scoring pattern.

There are 5 parts to your CIBIL report

1. Actual Score

Your score is shown at the top of the report on a scale. Score of people with credit history longer than 6 months are between 300 and 900. The higher the score, the better your credit report. An ideal score would range between 800 and 900. If your score is below 700, it is time take a serious look at your finances and make some important changes.CIBIL has also provided for a risk index for people with less than 6 months of credit history.  They will be graded on a risk index ranging from 1 to 5, where 1 would mean highest risk and 5 would mean lowest risk of default.  

2. Personal Data

This section has nothing to do with your score, it is just information available for the creditor. It includes the borrower's name, date of birth, gender, PAN card details, other identifying proof details that have given for the Know Your Customer (KYC) norms including address and contact numbers.

3. Employment information

Again this section does not affect your score. It gives the employment information that has been mentioned while applying for the loan or credit card. At times lenders give preferential rates or pre-approved loans to borrowers working for certain employers such as large Indian or Multinational Companies. 

4. Account information

This is the juiciest and longest part of the report. It is where different elements affect your score, pushing it up or bringing it down.


5. Enquiry information

This is a list of all of the people who have enquired about your credit: yourself, a lender, or any other authorized organization. Multiple "Hard" enquiries bring down the credit score they are enquires which come to CIBIL from lenders when you apply for a loan or a credit card. "Soft" enquiries do not affect your credit score. These soft enquiries generate when you ask for a report or a lender asks one without an application from you.


MadanRajiv Raj

Rajiv is a credit expert with 10 years of experience in personal finance and consumer banking industry and another 7 years in credit bureau sector. Rajiv was instrumental in setting up India’s first credit bureau, Credit Information Bureau (India) Limited (CIBIL). He has also worked with Citibank, Canara Bank, HDFC Bank, IDBI Bank and Experian in various capacities.

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