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Understand your CIBIL report

08-Feb-2016 written by : FSI-Team

Called for a copy of your CIBIL report and do not know how to decode it? If the information in your report looks like Greek and Latin to you, fear not. Let’s understand in depth what the CIBIL report is all about.

Firstly, let’s see why the CIBIL report becomes so critical with regards to your financial health. This is because the report contains detailed information regarding your credit history, and is used extensively by lenders when determining whether to approve or decline a loan or credit card application. It helps a lender to gauge your creditworthiness, and what is the possibility of a loan going ‘bad’ or there being a payment default.

An important component of the report is the credit score, a three-digit numeric representation ranging between 300 and 900 that is nothing but the crux of your credit report. Higher the score, the more creditworthy you are. With CIBIL for instance, a score of 750+ is considered to be good. It is this that lenders first see, and then proceed to review your application. Do keep in mind though that the credit score is not the only parameter taken into consideration, but other information including your income and other financial commitments is factored into the decision.

More about the Credit Information Report (CIR)

A CIR is divided into 6 sections:

  1. Personal information – This includes your personal details (name, date of birth, PAN number) as reported to CIBIL by its member institutions i.e. banks and financial institutions.
  2. Contact information – Under this section, up to four addresses will be captured, as well as phone numbers (mobile, home, work) and email addresses.
  3. Employment information – Details pertaining to your monthly or annual income are mentioned here, as reported by members. This information is based on the details filled in by you when applying for a loan.
  4. Account information – Within this section is essentially the crux of the credit report. It contains the details of all the credit facilities availed by you, including the name of the lender, type of credit (home loan/ auto loan/ overdraft etc.), the account numbers, ownership details, date the account has been opened, the date of last payment, loan amount, current balance and a month on month record (of up to 3 years) of your payments.
  5. Enquiry information – Each time you apply for a loan or credit card, the lender in question calls for a copy of your credit report. This is captured in the system automatically, and is known as an ‘enquiry’ or ‘hit’. The more the number of such hits, chances are that your score is likely to be impacted negatively. This is because multiple enquiries – especially if within a short span of time – can imply that the borrower is credit hungry, and the lender will approach your loan application (when you make one) with caution.

What you should look out for

The first thing to do would be to check your payment history, and ensure that it is both accurate and up to date. The ‘DPD’ mentioned in the report indicated how many ‘days past due’ the payment on a particular account is, and anything apart from ‘000’ or ‘STD’ is not looked upon favourably by a prospective lender.

DPD What it stands for What it means
STD Standard Payments are being made within 90 days
SMA

Special Mention

Account

This pertains to a special account being creating for

an account that is moving towards being sub-

standard

SUB Sub-standard Payment are being made after 90 days
DBT Doubtful

This implies that the account has been a sub-

standard account for a period of 12 months

LSS Loss

An account wherein loss (i.e. non-payment of dues)

has been identified, but it remains uncollectable.

XXX

Information not

received

This means that account information has not been

reported to the credit bureau by the concerned

lender

To cite an example using the above information, if there is a number in the DPD column, it means that the payment has been delayed by those many days. Hence, ‘070’ means that the payment is late by 70 days. Of course, it goes without saying that the ideal scenario is one wherein your report mentions ‘000’ under DPD, which means that there has been no payment delay.

Another crucial aspect to check is the status of your account. Remember, accounts that have been written off or settled, or cases where suits have been filed are not considered to be favourable. When you do not make an outstanding payment for more than 180 days, the bank or financial institution in question is required to ‘write off’ the amount. This then gets captured in your credit report, and will lower your score drastically.

Further, do also check the dates mentioned, i.e. the last payment date and the last reported date on your account. Let us assume you make a payment after the last reported date, chances are that it may reflect as unpaid, because it can take up to 45 days for information to be reported to the concerned bureau.

Personal information too should not be ignored. This is especially important to know to ensure that it is only your details that have been mentioned in the report.

In conclusion

Your CIBIL report is the key to financial good health and hence ideally should be reviewed at periodic intervals. Remember, it is better to ensure that your CIBIL score is good so that you can rest assured of being offered the most competitive credit facility when you require one.


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