There are times when we are confused between a CIBIL report and a CIBIL score of an individual. The CIBIL report of an individual is a detailed report of the credit history, including the number of loans taken, outstanding EMIs, personal information, contact details, employment details, loan account, and inquiry details regarding credit.
The Contrast between the Cibil Score and Credit Report
While the CIBIL score is a numeric representation of the credit history of the individual, it is a three-digit number starting from 300, reflecting the credit taking capacity of the borrower. It is based on the credit history, creditworthiness, payment history of the borrower. The past behavior of the borrower indicates what will be his future transactions related to credit.
CIBIL report includes information regarding the last 36 months or three years, while the cibil score reflects the results by assessing the previous 24 months or the past two years. Both the concepts are different, but while for loan application and processing, both play an essential role. They both help in assessing the loan eligibility of an individual.
Some of the Facts Related to Cibil Score and Credit Report
Usually, an individual should have a 6-month credit history to be eligible for a CIBIL score. But a consumer who is new to the credit consumption won’t have sufficient information about his credit history to generate his credit score. Over time these individuals can improve their credit history by making timely repayments, the right credit mix, and taking loans according to his credit taking capacity.
The CIBIL score will vary from 300 to 900. The chance of getting a loan approved by the banks is more if the credit score is near to 900. Statistically, 79% of the loans are sanctioned to consumers with a CIBIL score higher than 750.
Not everything depends on the CIBIL score, banks or financial institutions check the CIBIL report as well for a more excellent picture. Individuals with a CIBIL score of less than 750 also face difficulty in availing credit facilities. For this, the banks check the CIBIL report of the individual.
They check the past history, outstanding due if any, credit taking capacity of the borrower, employment details, red flags on loans taken, or the number of inquiries by the borrower, etc. this allows them to make a sound decision regarding whether to process the loan application or not.
Recently the financial institutions have started providing loans at a concessional rate of interest or a discounted rate of interest to the customers having positive credit history and have no outstanding dues. Thus, a good CIBIL score and a detailed CIBIL report may help you in saving by levying a lower rate of interest.
Financial goals by an individual can be attained when he works on building his score above 750 because that is set as a benchmark by the banks or the financial institutions. If an individual works on building his count, he will be monitoring his account and will know critical updates about his personal loan account and savings account. This will help him to understand when to need a loan to achieve financial goals.
All About Cibil Report
CIBIL report, also termed as credit information report includes the record of an individual’s credit and loan related information. It not only consists of this but has information about the individual’s personal details such as employment details, address, PAN, gender, etc.
CIBIL generates the report through the data received by the financial institutions regarding the customer credit capacity. Following are the components of CIBIL report:
Personal information like name and address employment details including the salary of the individual loan information as to how many loans the individual has availed and at what interest rate default on loans, if there are any settlements of the loans, if there are any credit card details credit card bill payment defaultsCredit card processing rejected credit score
Customers can download their credit reports online, but for that, they need to avail it by informing the authority. The report will help him make sound decisions regarding credit.
Thus, a credit score reflects the creditworthiness of the individual, while the credit report is the detailed version of the individual’s credit behavior.
Thereby, we can summarize by stating the following points
To check the creditworthiness of an individual, banks have several options. Either they can check the credit score of the individual and based on that decide whether to give the loan or not, or the banks can review the credit report as well. The credit report is a detailed version of the credit behavior of an individual. More than credit and loan related information, credit report gives information about the following as well:
Personal information like name and address employment details including the salary of the individual loan details as to how many loans the individual has availed and at what interest rate default on investments if there are any settlements of the loans, if there are any credit card details credit card bill payment defaultsCredit card processing rejected credit score Thus, to get a clear picture of what is necessary is skimming through the credit report as well as emphasizing on the credit score of an individual.