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Credit Report
A three-digit number between 300 to 900
represents a consumer’s creditworthiness.
represents a consumer’s creditworthiness.
What is Credit Score?
A Credit Score is an integral part of anyone’s financial status. It is a three-digit number that ranges between 300 to 900 and determines one’s creditworthiness or ability to repay loans or debt. This number is often based on the consumer’s repayment and credit history across various financial institutions. Let us learn about the different credit score ranges and what they mean.
750-900
Excellent
650-749
Very Good
550-649
Low
350-549
Very Low
What is a Credit Score?
A CIBIL Score between 750 and 900 is considered excellent. It shows consistent payment history and a great payment track record. Banks consider you at low risk of defaulting on payments because of your credit score. This means they are likely to offer you loans and credit cards.
Chances of loan approval
High
Steps By Step Procedure to Create CIBIL Report
A CIBIL report is a comprehensive overview of a person's credit history. It contains information about their borrowing activities in the credit sector. It is a valuable source of insight and information. CRAs keep track of a person's borrowing activities. This information is used to calculate their credit score .The score ranges from 300 to 900.
This credit report powered by CIBIL helps CRAs to equate someone’s credit score, which in turn helps lending institutions comprehend the risk involved in lending money to that individual.
The average cost of a CIBIL report from an agency is INR 1000 or less. Here are the steps on how to create a CIBIL report with us:
Enter your mobile number linked to your bank account.
Enter the OTP received on your mobile number.
Enter your PAN card details, which include your PAN number, name, date of birth, and email id.
Confirm details to generate CIBIL report.
What is a CIBIL Report?
A CIBIL report is a comprehensive overview of a person's credit history. It contains information about their borrowing activities in the credit sector. It is a valuable source of insight and information. CRAs keep track of a person's borrowing activities. This information is used to calculate their credit score, which ranges from 300 to 900.
This credit report powered by CIBIL helps CRAs to equate someone’s credit score, which in turn, helps lending institutions comprehend the risks involved in lending money to that individual.
The CIBIL report includes your credit score, payment history, credit card utilization, age of accounts, total accounts, and inquiries on your account.
The CIBIL report mainly comprises a three-digit number used to represent how well the credit has been managed by you. It can be calculated from your personal or home loan or the credit cards used in the past. This is primarily a measure of your ability to borrow. It is based on your past credit behavior.
The credit score is proof to lenders that you are a responsible borrower. This increases the likelihood of loan repayment. In other words, it acts as a guarantee.
Why is Credit Score important?
Credit scores are indicators that allow a financial institution to assess your ability to repay the debt on time. The credit score is thus crucial in determining the risk of an individual or an asset.
How is your Credit Score Calculated?
A credit score is a comprehensive document prepared by a credit bureau that outlines your credit history. These credit bureaus gather and assess your financial information and prepare reports based on such details.While computing your CIBIL score, the following factors are considered:
Loan Repayment History:
Repayment history is among the key factors considered while preparing your credit report. The report will portray you as a responsible borrower if you constantly pay your loan EMIs or bills on time. It will show that you are always at low or no risk of default.
Duration of Credit History:
The credit report is also prepared for your credit history duration. The longer the duration of your credit history with timely payments, the better and more appealing the credit score. This information on your CIBIL report is crucial for calculating your CIBIL score.
Number of Hard Inquiries:
Every time you apply for a new loan or credit card or request for refinancing any existing loan, the lending institution does a credit check. All this information is recorded and provided in the CIBIL report. This helps CRAs to calculate your credit score properly.
Credit Utilization Ratio:
Your credit usage is also considered while computing your credit score. A credit utilization ratio is the proportion of your total credit amount to your total available credit limit. You may already be familiar with this concept. Your CIBIL report will show your credit limit usage. If the usage ranges between 30-40%, you get a high credit score.
Credit Mix:
Your credit score is also prepared based on your credit types. Whether it’s store accounts, mortgages, installment loans, or credit cards, the credit report takes all these into account. The report will give all this information, which further helps CRAs calculate your credit score. It’s advisable not to have too many credit accounts as it can lower the duration of your credit history.
Why Is It Important to Have a Good Credit Score?
A credit score is a summary of how well you have managed your debts and credit accounts. It demonstrates to potential creditors and lenders that you are reliable and able to repay the borrowings on time. It helps you to apply for a loan. A CIBIL Score will help the lending institution to decide whether to approve your credit application or not. Your CIBIL score must meet certain requirements for the application to be approved. Furthermore, a low-interest rate will be offered if approved.
How To Improve Your Credit Score
Make sure to pay the credit card bills and loan EMIs on time. You should never miss a payment in any situation.
Reduce the excess dependency on credit and regularly keep the credit utilization ratio at less than thirty percent.
If there are errors in the credit score, make sure it is rectified as early as possible by the credit bureau. Also, for this, make sure you regularly check your CIBIL score to notice any discrepancies right away.
Do not apply for multiple credit cards or loans too frequently. As such, it is better to wait for at least six months before availing of a new credit report once again.
It is better not to close the oldest credit card you have. Long credit history will help lenders undertake credit-based decisions with much more confidence.
Ensure the CIBIL report contains a balanced selection of unsecured credit products, like credit cards and personal loans. Include secured credit options too, like car loans and home loans.
Get expert advice from the experienced professionals at Piramal Finance to make significant improvements to your credit report.
Benefits Of Maintaining a High Credit Score
Maintaining a high CIBIL Score has plenty of benefits, from more lender choices to low-interest rates. Let’s check these benefits in detail:
High Credit Limit:
Having a good credit score means you’re creditworthy and financially stable. It means your credit score will be high, and your debt-to-income ratio will be stable. This will entice the lending institutions to loan you more money. You can easily request a hike in credit card limit or on other lines of credit.
Lower Interest Rate:
A good credit score will portray you as a responsible borrower. It shows that you pay your debt or bills on time. This will help you get a lower interest rate on the next credit you borrow from lenders. It means that the total interest payable for that credit will be lower than usual.
Increased Negotiating & Purchasing Power:
Maintaining a good CIBIL score will help you get preapproved or prequalified loans for a home or car by lenders. Pre-approved loans give you an advantage. You can negotiate better prices with lenders and close any vehicle or real estate deal quickly. This is not possible with other loan options. An excellent credit report gives you the power to negotiate confidently with lenders.
What To Do If Your Credit Score Is Low?
The information provided in a credit report is subject to changes. If your credit report comes with information that creates a bad impression in front of lenders, you can change it. Of course, you’ll have to work on your financial health and ensure everything falls in place. To turn your credit score from bad to good, work on these aspects:
- Timely Payment of Bills & EMIs: When it comes to a credit score, your repayment history is the first thing lenders see. If you always repay your EMIs and bills on time, your repayment history will improve and impress the lenders. Set up autopay or reminders to make sure you pay EMIs on time. Make sure your account has sufficient balance to cover the repayments.
- Pay off your existing debts: This can be a reason for having a bad credit report. You may have used your full credit limit. A credit report from CIBIL will show your credit utilization rate. This is the amount of credit limit you are currently using.Try to use only 30% of the credit limit you have to generate a good credit report. If it’s already been used, try not using your credit or EMI cards anymore. Make sure you progressively pay off all your existing debts.
- Do Not Perform Any Hard Inquiries Again: If you want to improve your credit report, try not to apply for any new loan or credit for some time. When you apply for credit, the lender performs a CIBIL score check, which impacts the CIBIL score and report. The report will show how many times your credit has been checked. If it’s more than one or two times, the lender will consider you as credit hungry. They may reject your future application or charge a high-interest rate. So, the best solution is to avoid taking any credit until 75% of your existing debts are paid off.
Why Should You Get A Credit Report?
You can get an online credit report easily. Additionally, there are many benefits to checking your credit score. These include:
A Free Credit Report
You can not only download your credit report completely free but also compare the credit score from different bureaus for free. You can get your credit report for free for a lifetime and stay updated on this matter.
Chances of Approval
Your chance of securing a loan approval increases when you know the credit report beforehand and work to improve that score.
Credit Advisory Services
We offer credit advisory services. This helps our customers improve, build, and maintain a higher credit score. This makes it easier for them to access a formal line of credit.
Access Credit Report Through Mobile or Web
We let you access your credit report from anywhere and at any time. There is no restriction on accessing credit reports through web browsers or mobile phones. How convenient is that?
So, are you planning to secure a loan for yourself or your family? Have you ever checked your credit report before? Getting to know your credit score has never been so easy and so affordable. It will take you a mere two minutes to get to know your entire credit history. If you want more details on this matter, don’t forget to get in touch with our experts right away! We are here as the helping hand you require for all your lending needs. If you want more details on this matter, don’t forget to get in touch with our experts right away! We are here as the helping hand you require for all your lending needs.
So, are you planning to secure a loan for yourself or your family? Have you ever checked your credit report before? Getting to know your credit score has never been so easy and so affordable. It will take you a mere two minutes to get to know your entire credit history. If you want more details on this matter, don’t forget to get in touch with our experts right away! We are here as the helping hand you require for all your lending needs. If you want more details on this matter, don’t forget to get in touch with our experts right away! We are here as the helping hand you require for all your lending needs.
What is the Difference Between a Credit Score, a Credit Rating, and a Credit Report?
The key differences between a credit score, credit report, and credit rating are outlined in the table below:
| Credit Report | Credit Score | Credit Rating |
|---|---|---|
| It is a comprehensive, summarized copy of your credit history and resembles your creditworthiness. Most lenders use this document as your credit reference. | It is a 3-digit summarized version of your credit report. It considers all the information on the report, measures your credit risk, and computes an overall score ranging between 300-900. | After determining whether you can fulfill your financial commitments, credit bureaus provide credit ratings to businesses and even governments. Credit ratings show lenders how likely you’re to repay loans. |
Understanding The CIBIL Score Through Key Terms
| NA or NH | NA stands for Not Applicable, and NH stands for No History. NA in your credit report means there is no information available about your credit history. Since there isn’t any credit information to include in the report, this is also referred to as NH. |
| STD | STD in credit report stands for ‘Standard.’ You’ll find this term in your loan accounts and credit report. In your report, `STD` indicates that you have paid all outstanding amounts within 90 days, or on the due date. |
| SMA | SMA stands for Special Mention Account. This indicates that a designated account has been established to record Standard Accounts that have shifted to Sub-Standard. In such cases, payments are received after 90 days of the due date. |
| DBT | DBT here stands for Doubtful. It means that one of your loan accounts has stayed/remained as a Sub-Standard account for a year (12 months). |
| LSS | It stands for Loss. It implies one of your accounts where loss has been detected. LSS on your credit report means that you haven’t paid that loss amount, and it’s still uncollectible. |
| DPD | The full form of DPD is Day Past Dues. It serves as a track of your credit accounts’ payment schedules. Your payment is shown in the DPD area even though it is one day late. DPD can be modelled in one of two ways: Note or Numeric |
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Frequently Asked Questions
Why does my credit score keep changing?
It is natural for your credit score to keep changing over time. Your credit score is updated and altered whenever new data is submitted to the three national consumer reporting agencies (CRAs).
What is the minimum score needed in a credit report to get a personal loan?
A personal loan requires minimum score of between 720 and 750 on your credit report. If you have a good credit rating, banks will easily grant your request for a personal loan. They might also give you the loan amount you want at a low-interest rate.
Can everyone access my credit report?
Your credit report cannot be viewed by just anyone. A company needs to have what is known as a “permissible purpose” to see your report.
Why is a PAN card required for checking the credit report?
Since the credit score is linked to the PAN card number, a PAN card is required for a credit report check. Also, PAN cards are needed for tax return filing and address verification.
Can credit report inquiries affect the report?
A hard credit query may lower your credit score by up to 10 points. This harm may not always be that severe.
Why do we need a phone number for a credit report?
A phone number is used to verify the identity of the person receiving the credit report. This ensures that only an authorized person can access it.
What is the significance of the CIBIL report?
A CIBIL report is a useful tool for banks and NBFCs. It helps them to assess an individual's reliability and creditworthiness. This helps them to determine their ability to repay any debts in a timely manner. The significance of the credit score thus lies in the individual’s risk assessment.
What can be considered a good credit score?
Credit scores typically range from 300 to 850. Scores between 800 to 850 are considered excellent. Scores between 740 to 799 are considered very good. Scores between 670 to 739 are considered good. Scores between 580 to 669 are considered fair and scores between 300 to 579 are considered poor.
What are the factors that are included in the preparation of a credit report?
Score calculation in your credit report includes several factors. Common and significant ones include repayment records, credit history, and credit inquiry.
What type of information is included in my credit report?
Your credit reports contain various types of information about your credit lines, repayment history, and credit limits. They also provide other details.
What kind of information is not included in the credit report?
Your credit report does not include: - Marital status - Health information - Shopping patterns - Financial transactions - Income - Bank balances - Criminal history - Level of education
Is it possible to delete information from the credit report?
Unfavorable data that is true cannot be changed and usually stays on your credit reports for seven years. Creditors look at your CIBIL reports to evaluate your past debt repayment history. They use this information to decide if they will give you credit and what terms to offer.
What do I need to do if I find errors on my credit report?
The first step you must take if you find an inaccuracy in your credit report is to dispute the data with the credit reporting agency. You must provide copies of the supporting documentation for your claim and a written explanation of what you believe to be incorrect.
Is the Credit Information Report the same as the CIBIL Score?
A credit report includes personal information such as a PAN number, name, residence, gender, and other facts in addition to financial information. The CIBIL report is a crucial tool for tracking all of your credit-related information. Using client credit information obtained from multiple banks and lending organizations, CIBIL generates a CIBIL report.
Who can access my credit score?
Your credit score can be checked by prospective lenders, your present creditors, insurance providers, and occasionally even your employer. These individuals and entities can evaluate your record whenever you make a credit request or after they have granted you a loan or credit.
Why do lenders check the Credit Score?
Prospective lenders review your credit score to determine your likelihood of repaying the money you borrowed. A solid credit history shows that you have been a reliable borrower, and creditors will be more eager to give you that new loan or credit.
Would checking my CIBIL credit report lead to its decrease?
You have unlimited access to your credit report. This is so that your inquiry, apart from those conducted by creditors whenever you request a loan, is logged as a soft inquiry. The credit report has no effect from soft inquiries.
What is the minimum credit score required for any type of loan?
The minimum score required to apply for any type of loan is 750. Although you can also apply with a lower score, your chances of approval won’t be that high. A score of 750 or above will help you get your loan application approved quickly.
How do I increase/improve my credit score?
Pay your debts on time, accrue a high score, and your credit score will improve. To avoid worrying about missing deadlines, use a program that enables automated bill payment. You should avoid doing anything too much: Apply for credit responsibly. Do not take on much debt at once.