The Credit Information Bureau India Limited or CIBIL is one of the 6 registered Credit Bureaus in India which is responsible for collecting and storing your credit information. The Bureau provides you with a CIBIL score that depicts your creditworthiness. Ranging between scores of 300 and 900, the CIBIL score is shared with financial institutions and banks to determine acceptance or rejection of your loan application. The higher your CIBIL score, the easier it is to get a loan.
The growing use of social media and mobile apps allows financial companies to access permission-based data of the users. Apart from that, digital transactions and GPS information can help AI technology to create an income and risk profile for users.
First-time loan applicants with no credit history can thus benefit because the data collected and analyzed by Artificial Intelligence Technology will help in the prediction of their loan repayment.
• CIBIL is not responsible for maintaining a list of defaulters.
CIBIL and other credit bureaus are only responsible for the collection and maintenance of an individual’s credit information which is provided to them by the bank, lenders, and other financial institutions. However, they do not generate or maintain any defaulter’s list.
• Credit Score has no relation with Investments and other Accounts
A credit score is calculated based on your past and ongoing credit activities such as payment history, available credit in use, types of credit used, credit history, number of credit inquiries, etc. None of your other accounts is taken into consideration. Your credit score does not include a summary of activities related to your investments like fixed deposits, mutual funds, trading accounts, savings accounts, etc.
• Available Credit in Use
Do you know how much of your available credit are you using? Credit utilization is an important component of your credit score after credit history. Keep your outstanding debt low, lower your credit usage and pay the balance of your Credit Card on time. Even if you pay off your balance every month, not paying on time can harm your credit score.
• You do not have the same credit score with different credit bureaus
The credit score generated by CIBIL might be different from the score generated by other credit bureaus. Each credit bureau uses its scoring model for the calculation of credit scores. In addition, other lenders may report updated credit information to credit bureaus on different dates.
• The vast ownership structure of CIBIL
CIBIL holds significant leverage in the Indian financial system. The major stakeholders are the banking and non-banking firms. TransUnion International Inc. is the most indispensable stakeholder at 66% hold in CIBIL. TransUnion International Inc. is a data analytics company that also provides all the general information and helps businesses manage financial risks.
The remaining stake of CIBIL is distributed amongst a few other financial institutions.
• Impact of checking CIBIL score
Individuals worry that if they inquire about their credit score multiple times, their CIBIL score will get adversely affected. If borrowers themselves pursue an inquiry directly from the credit bureaus or the authorized entities, it is termed a soft inquiry. However, if a bank or lender requests information about your CIBIL score from a credit bureau (this is called a hard request), this will negatively affect your score.
• Applicable details included in the CIBIL check
A CIBIL credit report includes details about your current and past credit activities. This summary has nothing to do with other accounts like Fixed deposits, savings, trading, or other investment accounts. This information does not affect CIBIL checks.
• CIBIL 2.0
CIBIL has recently released a new version called CIBIL 2.0. CIBIL 2.0 scores point for first-time borrowers with a credit history of fewer than six months. Scores range from 1 to 5. If a borrower's CIBIL rating is 1, they are more likely to default. 1 is called high risk, and 5 is called low risk.
A good credit score opens many opportunities, especially when borrowing from lenders. It is a 3-digit credit number that is generated by credit bureaus like CIBIL, Equifax, Experian and Highmark based on your past credit information. The score ranges between 300 and 900. Higher your credit score, the easier it is to avail credit from lenders.
You can find a lot of information about credit scores on the Internet. However, there are some facts that many people are not aware of. Having a good credit score and being informed about it is an advantage if you plan to get a loan from a lender in the future.
If you have a CIBIL score of 750 and above, the chances of getting a loan at an attractive interest rate are higher. The CIBIL credit score is usually a value between 300 and 900.
What, if your CIBIL score is high? Why the CIBIL score is so important? If you are looking for answers to these questions, weâ€™ve got the answers ready for you. A credit score is a 3-digit score given by any of the credit bureaus - CIBIL, Experian, Equifax or CRIF High Mark, based on your past and present credit behavior.
Personal loans are one of the widely used funding methods that aid millions of people through difficult times.
Loans have made our lives easier and simpler. From home loans to car loans to business loans, many types of loans are available in the market to cater to your different needs.
Personal loans are a great option for financial emergencies as they do not require collateral and have simple formalities. But did you know that you can improve your credit score with a personal loan? You must have heard that it is also necessary to have a good credit score to get a personal loan in the first place.