CIBIL Credit Score: All You Need To Know Before Applying For Loan

Credit Information Bureau (India) Limited is popularly known as CIBIL which a credit information company in India. The main purpose of the company is to collect and maintain credit records of individuals and commercial entities.

The company also provides information on credit payment history across loan types and credit institutions over a period of time.

CIBIL Credit score is necessary when an individual is applying for a loan. Most of the time, loans are approved for individuals with a score higher than 750. For others, they may reject the application or charge high-interest rate.

Here are important things to know about CIBIL Credit Score before applying for loan:

Subscription to CIBIL Score

Individuals who are interested in knowing CIBIL score just for a single time, than the cost would be Rs 550 per report. For Bi-annual subscription where an individual will receive 2 Score Reports and amount charged is Rs 800.

A quarterly subscription of your Cibil Credit Score would cost you as much as Rs 1200. Individuals will get as many as 4 score reports in quarterly subscription

Understanding CIBIL Score

Your current credit score will be derived based on your credit behavior as reflected in the ‘Accounts' and ‘Enquiries' section. CIBIL score ranges between 300-900. A score which is above 700 is generally considered good.

A customer gets a score of zero, when his credit history is less than six months. A credit score of -1 means that a customer has no credit history.

Factors That Decide Your Cibil Credit Score

Based on the past track record of payment, credit history and the amount of loans availed, the score is derived. 

If you have defaulted your credit card payment or loan repayments regularly, it there are changes that your credit score will be low.

Higher loan amounts can also lead to lower credit score such as if you have a home loan, consumer loan and also credit card outstanding and when you are finding it difficult to make re-payments.

 

Guarantor of Loan

If you are a guarantor for certain loans as a means of security for the loan amount they provide. Note that a guarantor on any form of loan is equally responsible to ensure the repayment of the loan.

If there is any default on the payment of the loan by the principal applicant, this will affect your Credit Score as well.

Individuals should make sure that an applicant will be able to repay the loan on time before signing as guarantor of the loan.

Add-On credit card

Credit card holders who have applied for Add-on credit card for family members is responsible for payments for charges and liability on both the primary and add-on credit card.

Any default made in payments on add-on card will reflect in CIR of both the primary and add-on card holder.

Details of Credit Information Report

The CIR will have information on your CIBIL Score. It will have personal information such as your name, date of birth, gender and identification numbers such as PAN, passport number, voter's number.

Contact Information such as address and telephone numbers are provided up to 4 addresses are present.

Employment Information regarding monthly or annual income details as reported by the members by Banks and Financial institutions.

Account information section contains the details of your credit facilities including name of lenders, type of credit facilities account numbers, ownership details, date opened, date of last payment, loan amount, current balance and a month on month record (of up to 3 years) of your payments.

Enquiry Information

Every time you apply for a loan or credit card, the respective Bank or financial institution accesses your CIR. The system makes a note of this in your credit history and the same is referred as "Enquiries", as per CIBIL.