TransUnion CIBIL (formerly Credit Information Bureau (India) Limited) was established in 2000 and is India’s top credit information company. It has the largest collection of consumer information and generates CIBIL Credit Reports that indicate your financial status. Read this article further to know more about the CIBIL credit report, its importance, and the top 3 solutions for credit report problems.
What is a CIBIL Credit Report?
As the name suggests, a credit report shows a detailed description of your financial history, such as the history of credit cards, loans, etc. The report consists of personal information, credit accounts, public records, and credit inquiries. The credit report does not display your credit score. However, it has several pages that include:
- Your personal information
- List of credit accounts that are opened and closed
- Credit inquiries that you have made
- Public records such as bankruptcies, foreclosures, tax liens, etc
The credit reports can have errors when you don’t update them regularly. Hence, make a habit of reviewing your credit report once a year regularly. If you find any errors, report them and get them corrected immediately.
What Is The Purpose of Credit Reports?
- Your Credit Report is used to determine your creditworthiness.
- It helps in reviewing your missed or late payments
- You can check your credit score online
- It is used to analyze all credit and loan accounts under one platform
- You can report the errors that you find in your credit report.
- It helps in making effective financial decisions, etc.
How To Get Your Credit Report?
Majority of the Credit Information Companies usually offer credit reports through online and offline modes. So you have to fill in the required details and make a payment to get your credit report.
Online Mode: if you want to get your credit report online, you have to submit the following documents such as your Name, Date of birth, Address, PAN card number, and identity authentication
Offline Mode: Here are the steps to follow if you want to get your credit report offline:
1: Visit the official website of the CIC’.
2: Next, download and fill in the form requesting your credit report
3: Once you have filled your form, you have to submit a Self-attested and scanned copy of your Proof of Identity such as PAN card, Driving Licence, etc.
4: Then, enclose a Demand Draft (DD) for the required fee
5: Finally, mail the copy of your documents along with the DD to the address mentioned on the CIC’s website.
Difference Between a Credit Score and a Credit Report
|Credit Report||Credit Score|
|Your credit report contains information on both past and current credit activities. This includes mortgages, credit card accounts, student loans, and inquiries on your credit history.||A credit score is a 3-digit numerical grade showing the creditworthiness of an individual. It ranges from 300 to 900.|
|The credit report shows how you manage your credit and you can have control over the listings shown.||The Credit Bureau generates the credit score based on your credit history.|
|The credit report gives an overall outline of how much you owe your creditors over a while, whether you have made your repayments consistently, and for how long each credit account was open. The report also shows records such as court judgments, bankruptcy filings, etc.||A high credit score denotes that you are a low-risk borrower, which makes it easy to qualify for a loan.|
|If you want to access your credit report, you can contact the credit reporting agencies or use a credit monitoring service that provides you with this information.||Your credit score is a part of the credit report.|
Credit Reports For Companies And Businesses
Credit Information Companies generate credit reports and assign credit scores to businesses similar to individual credit reports. Suppliers and Government agencies review this credit report of business while providing utility and business contracts.
The credit report for businesses provides information related to the establishment, owners/directors, employees, profit and loss, liability, assets, pending court cases (if any), etc. However, these credit reports are expensive based on the amount and type of information it provides.
Key Terms in The Credit Reports
NA or NH: You will see an NA or NH on your credit score if you have never owned a credit card or taken a loan. It also indicates that there is either no, little, or insufficient credit activity to create a report or to generate an online credit score.
STD: It indicates that the payments are made within the due dates.
SMA: It shows that the borrower has delayed the repayments.
DBT: The DBT remark appears on your credit report when the credit information has been inactive for over 12 months.
LSS: Your credit report may indicate LSS if the lender reports your loan/credit card account as a loss or if your account remains as a defaulter for an extended period.
DPD: Days past due (DPD) represents the number of days that the account has not received payment.
Written Off/Settled Status: This occurs when the borrower could not make the repayment but has come to an agreement with the lender either for a repayment plan or a settlement.
Reading a Credit Report
Your credit report contains details of your credit accounts such as personal loans, credit cards, auto loans, home loans, and any other form of a loan. It includes information such as your payment history, credit limit, account balance, the opening date of credit, and the status of loans (whether close or open, paid in full, or not paid in full). The report gives detailed information about your new credit inquiries, collection records, and public records such as bankruptcy or a tax lien.
So here is a breakdown of how you can read your credit report:
This section contains information related to your identity, such as your name, address, current and previous accounts, date of birth, etc. If there is any incorrect information in the report, you must report this to the Credit Rating Agency (CRA) as this can meant that wrong data is reflected in the report or credit fraud.
This section provides information about your present and past credit account. So make sure you check the details of this section carefully. The details that you must check are the Date of opening, Name of creditor, Current balance, Highest balance/credit limit, Monthly payment history, Account type (Instalment, revolving, open), Account ownership (Individual or joint), and Payment status.
This provides information related to bankruptcies filed, tax liens availed, or collection accounts. Here, you must check the dates mentioned as they directly affect how long they will appear on your credit report and affects your credit score.
This provides information about any inquiries that have been made by lenders or companies to determine the credit score of an individual. So if you apply for multiple loans, it can affect your credit score negatively. In most cases, inquiries do not always affect your credit score, as they can be soft inquiries by lenders for promotional purposes.
Will Checking CIBIL Report Repeatedly Affect My Credit Score?
There are two types of credit inquiries namely Hard inquiries and Soft inquiries. The inquiries that are made by banks and lending institutions when you apply for a new loan are known as ‘hard inquiries. And if there are multiple hard inquiries within a short period, it will negatively affect your credit score. And if you check your credit report, it is known as a soft inquiry. A soft inquiry will not negatively affect your credit score. So make sure you check your credit score often so that you can keep a track of any mistakes that could occur. Therefore, checking your credit report for your use will not affect your credit score.
Importance of Having a High CIBIL Score
Your CIBIL score acts as the first impression for the lender when you apply for a loan. So if you have a high credit score, your chances of getting your loan approved will also be high. Here are a few reasons why it is important to have a high CIBIL score:
- Having a high score helps in quick and hassle-free loan approval.
- Easily get loans at lower interest rates.
- Get easy and instant approval for rented/leased houses and apartments as a high score indicates that you can repay your debts on time..
- You will have the power to negotiate with your lender regarding your interest rates.
- Get approval for higher loan amounts easily.
3 Best Solutions For CIBIL Credit Report Problems
Problem: Error in your CIBIL Credit Report
Errors in your CIBIL report can be as small as a spelling mistake in your name or address. Though it is a small error, it can have a significant impact and cause damage to your credibility. There are chances of mistaken identity where you might find loan details of someone else in your credit report or any overdue loan amount that you haven’t taken. Therefore, these small errors can bring down your CIBIL score drastically and might even lead to the rejection of your loan application. Some of the errors that may occur in your CIBIL report are Inaccurate current balance, Inaccurate amount overdue, and Incorrect personal details.
Solution: The first step is to get your CIBIL credit report. And once you get your report, analyze the errors and raise a dispute immediately by filing a dispute resolution form which is available on the official CIBIL website. When you file a dispute, you must submit proof of your name, address, date of birth, and control number.
Problem: Days Past Due (DPD)-
Days Past Due represents the number of days repayment on an individual’s credit account is late that month. If it shows anything other than ‘000’, the lender takes it as a negative sign because it will mean that you failed to meet your financial obligations which might create a negative impression on your financial health.
Solution: The only solution to avoid unfavorable DPD is to pay your debts on time and avoid taking any unnecessary loans so that you can fulfill your financial requirements without any hassle.
Problem: Bad credit history-
A poor credit score or credit report that has negative remarks will reduce your chances of getting a loan, credit card, or any other kind of credit.
Solution: The only solution is to improve your credit score. So here are the steps you can follow to avoid or improve bad credit.
- Make payments on time without defaulting: You can set reminders or choose the auto-payment option so that you can easily repay your dues without missing out on payments.
- Avoid excessive debt: Take loan amounts only for what is required.
- Communicate with your lender: If you are not able to make payments on time, make sure you contact your bank or financial institution and talk about a credit plan.
You can avoid the potential problems that may occur in your CIBIL credit report by being financially responsible and taking the necessary steps to improve your credit score. You can follow the above-mentioned tips to improve your score and also make sure you check your credit score frequently. And you can also check your credit score from Buddy Score and get an instant Credit report to keep track of your credit health.
Q. How long will it take for the error in my credit report to be corrected and updated?
A. After you raise a dispute, the credit institutions will submit the dispute to CIBIL every 30 to 45 days. So it might take up to 30 days for the issue to be resolved.
Q. Why is it important to rectify the errors on my credit report?
A. First of all, you must check your credit report regularly as it helps in identifying potential errors in your CIBIL report. And once you identify errors, you have to report them immediately to the credit bureau so that the error is rectified as soon as possible. This will help you maintain a good credit profile and will improve your credit score. Therefore, if any error is not rectified, it might reduce your credit score drastically.