Credit Information Bureau (India) Limited, known as CIBIL™, is a credit rating agency that maintains credit-related records of both individuals and corporates.
Member banks and other financial institutions provide data to CIBIL™ on a periodic (usually monthly) basis on all the credit related activity of their customers including any late or missed payments, loans approved, credit limit, written off or settled accounts and so on.
Established in 2000, it is India’s First Credit Information Company.
RELEVANCE OF CIBIL
CIBIL Score or the credit score has a critical role to play in the loan and credit card approval process. It serves as the primary criteria on the basis of which Banks & NBFC’s lend loans to an individual.
If the credit score is less than 750, the loan is although qualified but the borrower may not get all the advantages .
Similarly, if the credit score is above 750, the borrower is considered as a credit worthy customer & his loan is approved quickly.
HOW CIBIL WORKS ?
The bureau collects monthly data from financial institutions with regards to customers loans and credit card payments. On the basis of this information, credit report & a credit score is generated by CIBIL , which is used by lenders to determine the financial health of the borrower.
Thus, CIBIL scores determine whether or not a person is eligible for a loan and a credit card. If the score is high , the loans will be easily approved by financial institutions at higher rates.
PRODUCTS OFFERED BY CIBIL
CIBIL offers three products viz. credit score, a credit report for individuals and credit report for companies:
- Credit Score :- Credit score refers to a 3 digit numeric value which represents the creditworthiness of an individual.
- Credit Report :– Credit report contains the credit information that CIBIL fetches from various financial institutions. This detailed report contains information about an individual’s history of borrowing and repayment routine, including defaults and delays.
- Credit report for Companies :– Company’s credit history is reported in a credit report for companies. It contains information regarding potential lenders, any pending lawsuits ,existing credit of company etc.
A person can get his CIBIL score generated by a bank by paying a small fee or he can download the report from the website free of cost. A lower CIBIL score can be improved by making regular repayments of loan which provides a better chance of getting loans and cards approved.