Unable to understand your credit report? Here is what you should do

03-May-2017 written by : FSI-Team

If you happen to take a quick headcount of people around you, you would find 9 out of 10 people using credit in some form or the other. Credit usage is omnipresent today and thus to have a good credit score is of primary importance. A good credit score is indicative of good financial health and opens up doors for you when you are in need of credit.

One of the pre-requisites of maintaining a good credit score is to check your credit report periodically. If you do not, you may run the risk of errors and discrepancies creeping into your report and before you know it you are looking for bad credit fix!

As per the diktat of Reserve Bank of India, all credit information companies are now mandated to issue one full credit report free of cost in the electronic format. This means that you can now access your free CIBIL score at least once a year, and you must take advantage of this benefit to review your credit report.

Accessing free CIBIL score is all very well, but what if you do request for your credit report, and are unable to understand it? Fear not, for we are here with easy tips to help you decode your credit report. In this article, we are referring to a CIBIL report as it is the most accessed by lenders and credit users alike.

We take you through various sections of your CIBIL report and what it contains

CIBIL TransUnion Score

  • This is a three-digit numeric between 300-900 to be found upfront
  • It is based on your credit usage pattern
  • The closer your CIBIL score is to 900, the higher the confidence that a prospective lender will have in your repayment capabilities. If your score is much lower than 750 (considered a satisfactory score) you may need to look out for bad credit fix.

Personal information

Contains the following information as reported by you to the lending institutions

  • Name
  • Date of Birth
  • Gender

Data generated through enquiry

Further identification details will feature in this section such as:

  • PAN card no
  • Passport
  • Voter ID
  • If there is a "e" symbol next to any of the details, it's indicative of the loan value you applied for

Contact Information

Shared with lending institution at the time of application for a credit facility

  • Address
  • Telephone No
  • Email id

Employment Information

  • Occupation
  • Income (At the time of availing of the credit facility)

Account Information

  • Details of your credit cards and loans
  • Lender details
  • Type of credit
  • The account number
  • Account opening date
  • Nature of the account (single or jointly held)
  • Last payment date
  • Loan amount
  • Overdue amount (if applicable)
  • Current outstanding
  • 36 month's record of month on month payment

Enquiry Information

  • No of "hard enquiries" or the number of times you have applied for a credit facility
  • Name of the lender
  • Date of application
  • Type and size of loan

Do note, that accessing your own CIBIL report does not count as a hard enquiry and therefore does not show up on your credit report. Accessing free CIBIL score at least once a year is therefore a prudent practice.

  • Each time you make a hard enquiry, the lender accesses you CIBIL report causing a small dent in your CIBIL score
  • Applying for too much credit in a short time span may make you seem credit hungry

Consumer Dispute Remarks

  • You can add comments to your credit report in this section
  • These remarks will be uploaded to your report and will be displayed to each lender that accesses your report within a year of adding remarks

Credit report terms you should be aware of

  • DPD- Days Past Due is an indicator of how many days the payment is delayed by in a month. If it's anything other than STD or standard, it has a negative impact on your CIBIL score
  • CN- Control Number- Vital number displayed at the top of the report and comes in handy in case you want to raise a dispute
  • Actual Payment Amount- This is the actual amount that you pay to your lender that is different from the EMI amount.
  • Amount Overdue- The amount that you have not paid to your lender on time
  • Settlement Amount- In case of a disputed loan or a credit card payment, where the borrower pays a certain portion of the outstanding and the remaining amount is written off by the lender.
  • Written Off Amount- This is when a loan is written off completely as there is no hope of recovery from the borrower.

Both a settlement and written off amount are black marks on your credit report and may make it difficult for you to access credit in the future.

Once you are equipped with better understanding of your credit report you can do what it takes to maintain a good credit score. Checking free CIBIL score once is year is one such thing apart from maintaining basic credit discipline. If you manage to do this without fail, there will be little or no chance of you seeking bad credit fix.



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