In August 2000, on the recommendations
of Siddiqui Committee, the CIBIL was formulated as one of its kind credit rating
company. It is owned by the leading banks including State Bank of India, Bank
of India, Indian Overseas Bank, Aditya Birla Trustee Company Pvt Ltd and many
other banks. However, the major stakeholder remains the Trans Union
International PLC, which is the leading global credit bureau player with stake
of 77.1% (as mentioned on home website). Some of the other facts about are as
follows:
What
is the full form of CIBIL?
Full form for CIBIL is Credit
Information Bureau (India) Limited
What does CIBIL do?
CIBIL
records the credit information for all loan providers of all the loan
consumers. Its help the money lenders (organized bunch) understand the
applicant credit repayment history and capacity to take additional loan.
How does it function?
Member financial institutions
|
CIBIL
|
Leading Companies
|
•
Provide
data regarding Loan & credit data of an individual
•
Sends
the information on monthly basis
|
• Stores the received data.
•
Creates
Credit Information Reports (CIR) based o the information received
|
•
Ask
for CIR reports from CIBIL in case of
sanction of any loan
•
This report helps to approve loan applications
|
CIBIL has many of its products
(TransUnion Score & CIR) which help the loan providers make quicker
decisions regarding the loan sanction from its applications. It is not the only
factor for approval of any loan but it is a major one. In order to get a green
nod for further loan processing, a minimum score of 750 (range of points:
300-900) credit points is required. If the score is satisfactory, then the
income proof and other documents are called for verification.
Can
you know your own CIBIL score?
CIBIL score can be received by an
individual from the CIBIL company website. It is a simple process where few
personal questions are asked to determine the authenticity of the applicant. On
payment of nominal fees, the applicant receives his credit score in next 24
hours. It is similar to the score, CIBIL sends to your bank in case if you
apply for loans.
What
are the factors that affect my credit score?
Payment History – Your payment
history affects your rating. This includes delay in payment of your EMIs,
delayed credit card bill payment or default in any payment. Any default
indicates failure in servicing future debts.
Increased Credit – It indicates additional
credit repayment burden on the applicant. It also pressurises the existing cash
flow payment.
Type of Loan- The nature of loan
acquired in past affects your credibility. A personal loan or unsecured kind of
loan increases risk of default of repayment.
How
do I improve my credit Score?
Know your current standing – The first step towards building positive score
is to know where you stand. Having an idea about your current outstanding loans
and working towards a repayment schedule.
Never delay payments –Any kind of delay in bill payments, be it credit
card or loan EMIs could reduce your score, which makes timely payments a key
role in maintaining a decent score.
Don’t utilise your entire credit – Never go overboard when it comes to utilising credit
limit. Spend within the limit is bound to build your score, while exceeding it
could come as an expense.
Limit your cards/loans – A quick look at your credit cards would help you
understand the actual cards you need. It only leads to complication in loan
repayment.
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