What Is Cibil™ Transunion Score?


 

A credit score can be referred as a 3-digit number between 300 and 900 which defines the credit merit of a credit card holder or of an individual who has taken a loan.

For sanctioning loan in India, the potential lenders adapt the credit scores calculated by CIBIL TransUnion, Experian, Equifax or CRIF High Mark. CIBIL scores is considered by several lenders to be the benchmark for granting a loan to a borrower. 

Overall functioning of credit scores helps to depict the credit and repayment history, utilization of credit, tenures of previous debts, and so on. Although the banks have their individual limit to give loans, an individual's chances of getting a loan approved is higher if credit score is 900. A better credit quality, not only increases your chances of availing a loan, it also opens a gate for a better interest rate and tenure. But what happens, when you do not have any credit score, and you have a need for a loan? 

CIBIL, arguably the leader in India’s credit information space, provides score to individuals with a repayment track of 6 months to a year. Thus, its score can either make or break the situation for a borrower seeking a loan or credit card from banks or non-banking finance companies (NBFCs). The manner in which you repay your present or had repaid the past debt would greatly determine your CIBIL score. CIBIL, arguably a leader in India’s credit information space, provides credit scores to individuals with a repayment track of at least 6 months to a year. Normally, the score that it assigns to individuals, ranges from 300-900. So, those getting a score of 750 and above would most likely get an approval to their credit application. Even those between 700 and 749 can hope for an approval. However, a score below 700 may not make lenders tick the application. Your CIBIL Score indicates financial stability and helps the lenders in deciding if lending to you is worth taking a risk or not. Simply speaking, CIBIL Score explains the probability of a borrower paying back the loan that was taken. CIBIL Scores are very important when it comes to availing credit, especially loan approvals. The banks check your CIBIL Score or credit score through CIBIL. A CIBIL score helps determine your creditworthiness which in turn will help you avail loans faster and easier.
When a borrower applies for a loan or a credit card at a bank or a financial institution, the lender checks the credit or the CIBIL Score first to determine if the applicant is eligible to avail the loan. The lender will not consider or reject an application if the CIBIL Score doesn’t meet their expectations or if its too low. But if the credit score is high, the lender will consider the application and move on to evaluate other factors before approving the application. Your CIBIL Score acts as the first impression for the lender. The higher the score, the better chances of the loan/ credit card being approved.

Your CIBIL score is the measure of your creditworthiness.” You might have heard this several times if you are even remotely acquainted with anybody from the finance and banking industry. But, what you might know is that it also plays a vital role in your loan application process. A good CIBIL score can increase your chances of getting a loan sanctioned at favourable interest rates. A low CIBIL is a cause for concern and can ruin the chances of your loan getting sanctioned by lenders. Even if the said loan passes through, it will be at a high rate of interest. However, this isn’t a cause for worry as such a situation is not permanent and can be rectified. It will take some time – maybe six months, a year or more- it all depends upon how bad your score is and how diligently you work to improve it.

A CIBIL report plays a prominent role in an individual’s financial journey. The lenders depend on your CIBIL report to verify an individual’s creditworthiness. The main purpose of a CIBIL Report is that it aids the lender as well as the borrower in identifying and understanding their credit history clearly and completely.


Purpose of a CIBIL Report :- A CIBIL Report helps to measure the ability of a borrower to repay the loan. The lenders refer the report and measure how much loan an individual currently has and if any loan can be taken further.

What is the definition of CIBIL?

Credit Information Bureau (India) Limited, commonly known as CIBIL™, is India’s first Credit Information Company or Credit Bureau. It maintains records of all credit-related activity of individuals and companies including loans and credit cards . The records are submitted to CIBIL™ by registered member banks and other financial institutions on a periodic (usually monthly) basis. Based on this data, CIBIL™ issues a Credit Information Report or CIR (commonly referred to as a credit report) and a credit score.

CIBIL™ was founded in 2000 in order to bring greater efficiency and transparency in the credit space. TransUnion International (a global credit bureau) and Dun and Bradstreet (a global provider of credit information) are technical partners of CIBIL™ in India. CIBIL™’s mission is “To catalyze growth of Credit in India through: solutions that enable well informed Credit decisions; technology that enables superior information availability; and people that provide high quality services.” It has an ISO 27001 rating, which is the highest security standard in the world.

Shareholders in CIBIL™ include TransUnion International, ICICI, SBI, IOB, HSBC, Union Bank of India, Bank of India, Bank of Baroda, and Allahabad Bank.

CIBIL™ has two focus areas: A Consumer Bureau that deals with consumer credit records and a Commercial Bureau that deals with the records of companies and institutions.

It is important to note that CIBIL™ is a database of credit information. It does not make any lending decisions. It provides data to banks and other lenders who use it as a quick and efficient resource to filter loan applications.

Most Important things you should know about CIBIL Report:

Decides the credibility: CIBIL Report describes the credibility of an individual. If you are an individual, who has managed to repay all the loans on time, you will have a good credit report.
Maintains a Monthly Record: CIBIL Report is based is based on the month on month details about the type of loans and the number of loans taken by an individual. It provides the entire credit related information of an individual.
Helps for Further Improvement: The CIBIL Report facilitates an individual to analyze the complete credit history and understand the scope of improvement in different areas.
Main component of CIBIL Report: A CIBIL Report essentially depicts the payment history of the loans belonging to an individual. It basically displays the exact portion of loan an individual has cleared and the current debt status of the individual.

ADVANTAGES OF GOOD CIBIL SCORE:

  1. Ability to get a line of credit easily.
    2. Quick approval for mortgages.
    3. Low interest credit card rates.
    4. No security deposit on cell phones.
    5. More negotiating power.
    6. Get approved for higher limits.
    7. Low interest rate home loans and car loans.

How Can You Check Your CIBIL Credit Score?

You have the easiest way to get own points instantly. It is the bureaus like CIBIL, Equifax, and Experian; they can allow your points considering goodwill history. Through these sites, you get to know exact reflection of yours, where you can stand in CIBIL calculation. The range starts from 300 to 900. If you can get 300 points out of 900, then without any decision with the lender you can put into reject list. 450 to 500 indicate you are better than first one but still, the position is same. 550 to 600 points means, start paying bills on time. 650 to 700 mean you can get approval, but few banks provide you a high-interest loan. 750 to 800 show you are a responsible person. 850 to 900 is excellent points, that shows you pay back on time, repayment, payment can do before the due date.

You should be kept in mind when you are planning to get any financial product for multiple purposes. If you want to check own points, then visit the official site, fill your name as per PAN ID, date of birth, gender, current-permanent address, registered email ID and mobile number. Before you can submit your information, answers few questions related to your product dues, outstanding, any pending amount, etc then accept terms and conditions of them. They can verify all shared information after that send confirmation within a day.

You can check your credit score by PAN card also. For that, you have to login their official site, enter your name as per PAN ID, date of birth, gender, address proof, registered email ID or mobile number. Before they can verify your shared information ask few questions which related to dues, outstanding amount and any penalty case. Then you have to accept terms and condition, within a day they can send an email of confirmation.

How Can You Manage CIBIL Credit Score?

If you want to maintain points, so you have a chance to check in a year or within six months and try to control your limit. For managing CIBIL credit score, you have to start doing few things.

On-Time Payment: When you get to know your points after checking online, then you have to start controlling expenses. If you want to fit yourself in more than 750 points, then start making payment on time before the due dates.

Magic of Utilization: The bank can provide your card with a limit. They can notice all the record of your spending, swipe, and purchases. When you can utilize your product for every single thing, it shows irresponsible behavior.

Keep Monitoring: When you have an option to check own report and calculate to save yourself, then have to use it. That’s why keep monitoring own points by online through PAN also. You can find your report within a year or in six months. If you find an issue login their site, and upload all the documents to clear your doubts. Otherwise, you will be there for next seven years.

These are the main factors in CIBIL credit score you have to maintain the things the way it is then nobody can drag you in defaulter list. Your little more concern can save you from the danger.

What Could be The Possible Cause of a Poor CIBIL Score?

A credit score can worsen on account of the following sins you may commit to your debt, intentionally or unintentionally. Let’s find out those sins below.

No Adherence to Timely Payment – Assume you are new to the corporate arena and got a credit card to dine and enjoy several other privileges that the plastic money enables. Being new can tempt you to spend beyond your limits and so can result the constant late payment of the bills. This, arguably, is the biggest reason for a dent in one’s credit score.

So, don’t be too swept away by the purchasing power of credit cards and use discretion in your plastic money spends. The more discretion you show on your spends lesser the bill will be to ensure a smooth repayment.

Fast Bumping Out the Credit Limit – Excessive credit card spends can take out a heavy chunk of the limit, thereby making default a possibility. Fearing the possible default, CIBIL can cut your credit score. The impulsive spending urge, which one can have, leads to bumping out the credit card limit. You should thus maintain a credit utilization of around 50% by controlling your impulsive urge.

Paying Only the Minimum Due – One always find an escape from the sin that he/she commits. The same happens in the world of credit cards where shoppers go wild in their spends to only inflate the bills to a considerably higher amount. But, what the credit card companies do? They provide the ‘Minimum Due’ teaser on the credit card statement. The fact that a minimum due is calculated at about 5% of the overall outstanding balance in a billing cycle makes it easy for the shoppers to pay. But, by doing so, you fall into a never-ending debt trap as interest and taxes keep adding to the bills to get even the minimum due become larger by the month. This can create a default situation. And so, the score comes down.

What is the validity of a CIBIL Transunion Score report? There is no specific validity of CIBIL report. If you apply for a CIBIL report say today would advise to get an updated report again after 6 months to check the active account status and Enquiry section. Banks and other financial institutions normally takes 45 - 60 days to update your payment history in the bureau. So if you have an active loan or credit cards you apply for CIBIL report twice in a year.

What is the validity of a CIBIL Transunion Score report?

There is no specific validity of CIBIL report. If you apply for a CIBIL report say today would advise to get an updated report again after 6 months to check the active account status and Enquiry section. Banks and other financial institutions normally takes 45 - 60 days to update your payment history in the bureau. So if you have an active loan or credit cards you apply for CIBIL report twice in a year.

 
 

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We provide advice and information on how to best manage your current credit to maximize the impact to your qualifying ability.
 
 

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