Learn to understand your credit report

07-Mar-2017 written by : FSI-Team

Any conscientious user of credit knows that one's credit score is of utmost importance in today's date. Without a high CIBIL score it is difficult to access any fresh line of credit. A good CIBIL score is therefore a prerequisite in today's world. Maintaining one's credit health not only entails making a continuous attempt at improving one's score, but also the regular credit checks. To keep a check on the credit report you must first know how to understand it. In this article, we therefore take you through the CIBIL report, to help you understand how it is to be read.

The CIBIL score

The CIBIL credit information report begins with the CIBIL score of the individual which ranges from 300-900. The calculation of the score is based on an algorithm that is inferred from the loan accounts and the service track record of an individual. A score of 750 is considered satisfactory, but the closer your score is to 900, the better are your chances of getting access to timely and hassle free credit.

Personal information


Below the CIBIL score, you will find all your relevant personal information such as name, date of birth, gender about from identification details such as passport, PAN, voter’s id or other such details that you have submitted as proof of identification to your lenders.


This section that is to be found below the identification section. This section contains your addresses residential, official and email. It also lists your temporary and permanent residence as it exists in the records of your lenders.

Employment details

Your lenders primarily deem you creditworthy or otherwise based on your income. There is a section in your CIBIL report that records information on your income along with your occupation and employment details. These details are recorded with the lender at the time of opening the credit facility with the concerned lender.

Account Information

This section that is to be found below the employment details is the most important part of your credit information report (CIR). This section records information on

  • The types of credit facilities you have availed of
  • The name of the lender/lenders
  • When each account was opened
  • The nature of the account (single or jointly held)
  • Last payment date
  • Loan amount
  • Overdue amount
  • A 36-month record of your payments (month on month)

This is the most important section of your credit report as it tells a prospective lender about how you have handled your credit accounts in the past and how you are handling your existing credit. If there is a red band on the left hand side of this section, it is an indication of some dispute regarding a particular credit facility. The band is removed after the resolution of the dispute.

If you have initiated a CIBIL dispute, wait until and resolution and give it a month or two before you re-check your credit report to see that the correct information is now being displayed. You can also add consumer dispute remarks below the account information section, if there is any matter you feel is of relevance to the dispute you have raised. These remarks will be available on your report for a year and will be displayed each time you access your report during the year.

Enquiry information

In this last section of your report, you will find details regarding the number of inquiries made by the lenders whom you have made an application to. In this section, there will be details such as, the name of the lender, date of application, type of credit facility you have applied and its size. Each inquiry made by a lender is called a hard inquiry. Too many hard inquiries will not work in your favour. Not only does your credit score take a small hit each time a hard inquiry is made, it makes you seem credit hungry to a prospective lender.

Your credit report is a summary of your borrowing and repayment history and is a snapshot of your credit behaviour. In today's context, it is of utmost importance as the Reserve Bank of India (RBI) has made it mandatory for all banks to refer to an individual's credit report as a part of his credit assessment process. Your credit report will therefore play an important role in deciding your fate when it comes to the approval of a new loan or a credit card that you have applied for.

Thus, it pays to know how to read your credit score and report correctly and know the factors that makes your credit score rise and fall. Lastly, a bi-annual credit check inclusive of one free CIBIL report that you can now avail of in a year, will ensure that no unwanted errors or discrepancies creep into your report thus keeping it blemish free. A good credit report in turn will enhance your chances of getting a credit facility at a time when you need it the most.



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