A Credit Information Report issued by CIBIL

Credit Information Bureau of India (CIBIL) is India's first credit information bureau. It basically collects information on borrowers from its members and hence crease the credit history of an commercial and consumer or individual borrowers.

CIBIL provides this information to its Members in the form of credit information reports.

What is a Credit Information Report (CIR)?

For banks and financial institutions, the importance of CIR is to ensure that they do not lend to anyone who has defaulted on their previous loans.

Suppose, an individual “Mr X." had borrowed a loan once from SBI in New Delhi and then he moved to Bangalore and approach HSBC. Then HSBC will request CIBIL for a credit report on “Mr X", and this report will tell the bank if the previous loan obligation was met along with other details regarding the loan.

All information presented as a part of the credit report is provided by financial institutions to CIBIL. These financial institutions are members of the credit bureau. Any changes that is carried out in the CIR is only after it has been certified by the concerned financial institution.

Is CIR important for individuals? Yes!

Before any loan is approved banks and other financial institutions refer to credit reports. This makes it important that individuals" credit report accurately reflects all their loans, cards and their payment history.

It is very common in India for most of us to give copies of driving licence, passport, voter identity card and permanent account number for obtaining various services like a mobile connection etc. If such documents land in the wrong hands then it can be misused, to obtain a loan or credit card fraudulently. This will lead to unwanted legal and financial mess.

One of the ways to ensure that your identity has not been stolen is by getting your credit information report at least once a year and ensuring that all loans outstanding reported are yours and there is no mis-match between what you have borrowed and what is being reported.

How to obtain the CIR?

Individuals who already have a loan in any form or who are planning to borrow, should ideally obtain their credit report every quarter just to ensure that the details presented are accurate.

It will cost Rs 142 to get a CIR. To get a more detailed analytical report which is called CIBIL TransUnion Score plus the CIR will cost Rs 450.

Along with the fees you will need a request form; an identity proof - PAN, Passport, Voter ID -- and an address proof -- Bank Statement, Electricity Bill, Telephone Bill, Passport and Credit Card Statement. For addition detail on request form you can visit this link (https://www.cibil.com/d2c/)

The online request form is available on this link (https://www.cibil.com/d2c/manageCustomerDetails.do?action=showAddPaymentPage)

Dealing with discrepancy?

It is possible that some discrepancy can occur or the report may not be completely updated, which can be due to incorrect or delayed or even a non-submission of data by a financial institution.

In such cases, take up the matter with the financial institution and then with the credit bureau. The bureau along with the financial institution is expected to resolve the problem by taking appropriate steps and correct or update the information within 30 days of being requested to do so.

Failure to do so the complaint can be filed with the banking ombudsman or consumer forums.

How to improve credit score?

There are simple rules and steps that an individual needs to follow in order to improve their credit score.

- Payments count: Whether they are loans, credit card payments, insurance premiums every payment counts. Set up an automated system with your bank on clearing the payments, and it will improve your credit score.

- Use credit card judiciously: Maintain and use your credit card. If utilised properly it will definitely increase your credit score. However, make sure to use it will and never make a late payment as that will reflect poorly on your credit score. Small things like not stretching your spending too close to your credit limit, regular use of the card but ensuring timely payments upfront is an excellent proof on how well you manage credit lent and hence boosting your credit score.

- Credit to debit ratio: What your credit report actually shows is the flow of credit and debt. Therefore, credit to debit ratio directly affects your credit score average. For example, if you own several debts and even if you are paying them on time, it will affect your credit score in negative terms as your total net worth goes down.

- Credit card: In line with the same credit to debit ratio aspect, closing down your credit card will not help the score. Better not use it but cancelling a credit card will not help you improve the credit score.

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