While applying for a credit card or loan, the first thing that is checked is your CIBIL score/credit score. People who apply for a loan are required to have a good credit score. Though, most of you may have come across the term CIBIL, there are very few who know what exactly CIBIL is. If you are one of those and are applying for loans or credit cards with no idea about your CIBIL score, then we are here to help you. Read on to find out what is CIBIL and its significance.
What Is CIBIL?
CIBIL or Credit Information Bureau (India) Limited (India’s first credit information bureau), is the only credit bureau in India. It is a repository of credit information, which contains the credit history of commercial and consumer borrowers of all the customers of its members (banks and financial institutions).
What Does CIBIL Do?
CIBIL maintains records and provides the information related to loans and credit cards to its members, in the form of credit information reports. CIBIL shares a reciprocate relationship with its members. It collates the credit information available from all its members, and gives back an informed report with CIBIL score, which helps them in their credit decision making. The CIBIL score of a person could lie between 300 to 900 points. A score above 750 is considered good by banks.
CIBIL maintains only credit information of various loan customers and credit card customers. The information comprises of personal information like name, address, date of birth, phone number(s), passport number, voter’s ID number, PAN, etc. and credit information like monthly repayment track record, loan type, outstanding amounts, loan amount disbursed, various dates etc. This information is then used by credit lenders to make effective credit decisions.
CIBIL helps banks, financial institutions and other financiers to share credit histories of retail and commercial customers. The bureau provides both positive and negative information about bank’s borrowers. In short it keeps a track of borrowers in paying loan. Banks can easily access borrower’s full credit history. If you are a defaulter your name will be added in this list and all the banks will have access to this list. So, if you apply for a loan or a credit card, before sanctioning your loan this list is searched for your name. Depending on your credit history, and other factors, the credit officer will take the decision to grant loan or not.
Also Read: 5 Tips To Maintain And Improve CIBIL Score