A credit report is issued by credit bureaus such as CIBIL in India. The CIBIL report contains details of a person’s credit history. It is essentially a summation of how you have managed your credit and payments. It also gives lenders a picture of a borrower’s creditworthiness and repayment capacity. However, your CIBIL report doesn’t include certain aspects of your financial history and track record.
Factors that go into credit reporting affect credit scores given by bureaus like CIBIL. Based on the inclusions in credit reports, credit scores in the range of 300 to 900 are assigned by CIBIL.
Traditional credit reports that don’t rely on machine learning or credit scoring artificial intelligence don’t have diverse data points that help lenders make decisions on the go. Information like your utility bills, investment details, and loans that are not borrowed through banks or financial institutions don’t find a place on your credit report.
Details of any utility bills such as your telephone bill or electricity bill may not be found on your credit report. Whether you have paid these bills or not, these details don’t find a place on the CIBIL report. Also, even if you have paid these bills through your bank account online, they will not be reflected on your credit report. But if you have not paid utility bills for a long time and if your utility firm forwards your account to a collection agency, then it may have chances of showing up on your report.
Typically, credit scoring artificial intelligence systems track such details to find out more about an individual’s spending and repayment habits.
A credit report does not show any details of your employment; whether you are a working professional or not right now. But if you have applied for a credit card or loan in the past and you had mentioned details of your employer then, your past employment details may show up on your CIBIL report. However, there may not be details of how long you were employed in the past job.
Your CIBIL credit report does not contain any information pertaining to your income. There may not be any details regarding your net worth or earning capability in the credit report. If you apply for credit through institutions using a credit scoring artificial intelligence system, then the salary and employment details could show up in the AI-based credit report.
The ratio derived between your actual usage of credit and the limit is called the credit utilisation ratio. This information is not provided in the credit report. However, banks may compute this on the basis of the information present in the credit report. Your credit score is affected by both over and under usage of credit. The ideal ratio that banks look for is anything below 30 per cent.
Only your credit data is available on your CIBIL report. Your marital status has no bearing on the credit report. So, any credit data of your spouse does not show up on your credit report. Even if you and your spouse have jointly opted for a loan or have an account together, only your information is reflected on your credit report.
Any details pertaining to your savings or various investments have no place on your credit report. Any transactions on your current, savings, fixed deposit or trading accounts don’t reflect on your credit report. Your credit score is computed on the basis of your credit history and current status and not on your overall financial position. However, the same may not be said of credit scoring artificial intelligence where data that reflects your entire financial transactions, history, behavioural traits, shopping habits etc may be collated for an alternative credit score.
The interest rates of loans you have borrowed elsewhere don’t show up on the credit report. Credit reports traditionally don’t take into account interest rates as long as old loans have been repaid.
If you have borrowed loans from private money lenders or pawn shops, such loans are not reflected in your credit report. These are not taken from lending institutions and are termed non-traditional loans.
Although the credit report reflects settlements of loans, it doesn’t actually reflect the reasons that led to loan settlements. In many cases, borrowers may have opted for loan settlement because a dire medical/financial emergency meant they couldn’t make payments on time. However, these reasons may only be explained to a lender when they raise a query or find a settlement status impacts loan approval. The reasons don’t find a place on your CIBIL credit report.
The monthly loan payments are included in the report only for a maximum of three years. Any payment information beyond the three years is not shown so it helps that you track your credit report on a regular basis to see if there are any errors or omissions.
Your credit report is a document that provides important information about your credit situation. The information it offers determines your credit score so having an understanding of the report is important.
Also, certain aspects such as your marital status or reasons for loan settlements are not included in the credit report because they are not indicative of your credit status and only reflect your financial position. However, lenders can raise queries about aspects such as settlement when they receive your loan application. Whether some aspects are included or not, it helps to track your credit report from time to time.