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Tips to understand CIBIL report correctly

06-Dec-2016 written by : FSI-Team

A credit report offers a peep into the creditworthiness and financial health of an individual. Lenders seek an applicant’s Credit Information Report (CIR) to assess his/her risk profile, check if they are in a position to bear the burden of an additional loan and also look at their past record to assess if they have been a disciplined borrower in the past.


This is for lenders; but if the CIR belongs to you do you know how to assess it? Looking at your CIBIL report can you understand what it says? Can you comprehend the various terms used in it or what it signifies? Can you decipher what does that three digit CIBIL Score mean to you? Understanding your CIR is very important and the below discussion will help you gain an insight in your credit health by looking at your CIR.

Understand your Credit Report

The first step to understanding your credit report is being aware of the information they contain and what it means. Some things may be obvious while some may take some technical knowledge to understand.

Be Aware of the information in CIR: The information contained in the CIR is broadly categorized into the following heads.

  • Personal Information: This is self explanatory as this section contains details pertaining to name, DOB, PAN, driving license, passport, voter’s identity card etc. Though there is nothing to understand here, yet this section requires careful attention as the information contained here must be checked for its accuracy and if required the necessary corrections must be made.
  • Contact Information: This is details about individual’s current address and also past addresses (if any), email address, telephone number, mobile number etc. Again the accuracy of this information is important.
  • Employment Information: As the name signifies the details about the current occupation, work place details, name of the company if salaried, duration of employment, income details etc.
  • Account Information: The above sections directly have no impact on calculating the score of an individual but accounts information and enquiries information do impact the score. This section contains details about all open loans and credit cards and also old loans etc. The name of the lender, loan type, total loan amount, unpaid amount etc are also reported in this section. The past repayment record, any over dues, number of days for which any amount has been overdue, the classification of the asset as per the overdue status is also recorded in this section. Thus this section attracts the maximum attention of lenders as they can assess if the repayment history and also get information about total dues for the applicant. If one is a loan defaulter as revealed by this section then lenders will be vary of lending to such an individual.
  • Enquiry Information: Hard enquiries also impact the credit score calculation. When a lender gets a loan application they seek the credit information of the applicant, this is known as a hard enquiry. All hard enquiries are reported in this section but soft enquiries are not. Soft enquiries are when an individual seeks his/her CIR with an idea of trying to assess his/her creditworthiness or with an aim to improve CIBIL score before applying for a loan.

What does the Score Mean?

The score is definitely the most important aspect in the credit report. Though this does not mean that other aspects are not significant but the score is a gist of the entire information contained in the CIR. The score can be interpreted to give some valuable information. The score is a number between 300 and 900 and sometimes it could also be NH/NA. NA means the history is less than six months so no score can be given. NH means no credit history. A score above 750 is an excellent score and means that the individual has an impeccable payment record, the credit utilization is under control and he/she does not exhibit credit hungry behavior. A score ranging from 700 to 750reflects fairly good credit behavior; though there is room for improvement but getting a loan would not be difficult for a person with this score. Score between 550 and 700 indicates irregular repayment history; getting a loan sanctioned will be difficult but might be possible if the lender agrees to accept a guarantee or considers the application provided there is guarantor for a loan. A person at this score needs to focus on his financial health and try to focus on improving not only the credit score but his/her overall financial health. Any score below 550 should ring alarm bells for the individual. This score reflects very poor credit behavior, it could also be indicative of loans that have been written off and off course defaults in payments. Getting a loan with this is almost impossible.

The CIR is a comprehensive document which provides a lot of information. An individual should have a look at it and understand his/her report so that they not only get a picture of their financial health but also figure out how to improve their credit health.


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