When applying for a loan, maintaining a high credit score (CIBIL score) is essential. Lenders typically verify your credit rating before approving your loan application. It is essential to keep an eye on your credit score because it is one of the most important factors in determining your creditworthiness.
While applying for a loan, you might come across some surprises if you haven’t checked your credit score beforehand. Despite paying installments regularly, some individuals might still get rejected for the loan due to errors in their credit information reports.
Situations like these are common as most individuals tend to overlook their credit history unless it’s time to borrow funds. While its important to maintain a high credit score, it is crucial to keep a check on your credit information report to avoid errors.
To maintain your credit history, you must understand what a credit information report is, the components included in it, and how it can impact your loan application process in the future. In this blog, we will discuss how to interpret your CIBIL credit information report.
Understand Key Components of Credit Information Report
CIBIL Score
Your CIBIL score is the credit score generated by the Credit Information Bureau of India Limited, an Indian credit rating agency that maintains and records the credit information of individuals and corporates who have availed of loans. The score ranges from 300 to 900. A credit score closer to 900 is considered good and makes you appear trustworthy to lenders. This score determines your creditworthiness and ultimately decides whether to give you a loan and the rate of interest on it.
Personal Information
This section of the credit information report contains your personal details, which are mandatory for verification. These include your name, address, phone number, gender, and date of birth. The section also includes the Adhaar number, PAN number, voter’s card, passport number, and other details as requested by the lender. Besides this, your contact information, such as phone number, email ID, and addresses (home address, office address, residential address, and permanent address) are also included.
Occupation Information
This section contains the details regarding your income and employment as recorded by the lender at the time of taking the loan.
Account Information
This is the most important section of your credit information report as it contains all the information regarding your credit cards and loans. The information is presented along with the lender’s name, account number, type of loan/credit, ownership type, current amount, outstanding amount, and monthly payment details for the last 36 months.
Enquiry Information
This section contains details about the inquiries that lenders have made for your loan application. When you apply for a credit card or a loan, the lender checks your credit history and behaviour, which is registered. The information includes the lender’s name, your name, date of application, loan type, and loan amount.
Red Box
If you have any ongoing disputes in your credit report, a red box will appear above the ‘Account Details’ section in your credit report. The red box will highlight which disputes are still open. Once they are resolved, the red box will disappear.
Also Read: 7 Tips To Choose Best Personal Loan In India
Common Terms Used In The Credit Report
| CN (Control Number) | A 9-digit number that serves as the reference number for your credit report. |
| NPA (Non-performing Asset) | Payments overdue for more than 90 days. |
| DPD (Days Past Due) | The number of days that have passed beyond the due date. |
| Amount Overdue | Principal and interest amount that has not been paid to the lender on time. |
| Settlement Amount | In case of a payment dispute, the lender and borrower decide on an amount to settle it. This amount is lower than the loan amount. |
| Written-off Amount | The remaining amount after the lender and borrower decide upon the settlement amount. |
| Written-off and Settled Status | When the lender settles your loan and writes off a part of loan |
| High Credit | The highest amount billed on your credit cards or overdraft. |
Understanding your CIBIL credit information report is crucial to determine where you stand when it comes to credit behaviour. In addition to this, it will help you rectify errors in your report, if any, on time. Having a clear credit history assists you in availing of funds in a stress-free manner. It accelerates loan application approval and increases your chances of getting low-interest rates on your loans
