Applying for and even availing a variety of credit is easier now for potential borrowers than it ever has been before. Be it getting a new credit card or availing one of the widest range of loans available in the market, seeking credit is simple, convenient and hassle-free these days.
However, a potential borrower must be aware of practices that would help in long-term experiences with their credit activities. The first and foremost of these is keeping a keen eye on your credit history. The most effective means of achieving this is through checking and reviewing your CIBIL score and CIBIL report on a regular note.
You can easily check your latest CIBIL score and CIBIL report on the Finserv MARKETS app. The CIBIL report available on the Finserv MARKETS app can provide you with a comprehensive health insight of your finances and help you make improved and informed financial decisions.
Most people new to credit in general or loan applications, in particular, are often confused between these two similar-sounding terms that are CIBIL score and CIBIL report. However, the two terms cannot be used interchangeably. As a potential or existing borrower, here are some important points to help you make that crucial difference between CIBIL score and CIBIL report.
What is CIBIL?
CIBIL, founded in 2000, stands for Credit Information Bureau (India) Limited and is the country’s primary credit information company. The prime function of CIBIL is to maintain detailed records of the credit activities of not only individuals but also companies and institutions. These records by CIBIL are collected through the periodic information it receives through member banks and financial institutions.
The terms CIBIL score and CIBIL report discussed here are with respect to the credit activities of individuals and are handled by the Consumer Bureau of CIBIL.
What is CIBIL Report?
The CIBIL report, also known as Credit Information Report or CIR, is a comprehensive record generated by CIBIL about an individual’s overall credit history over 36 months. This includes all relevant details related to past and existing credit cards as well as loans that the individual has availed and made payments for.
CIBIL reports portray a wide variety of information about an individual which includes – their personal information, employment history, and income details. Apart from these, CIBIL reports also contain a detailed account of all their credit-related activities. These include details of all types of loans availed by them, timelines of repayments, payment defaults and loan settlements.
An important piece of information contained within a CIBIL report is particularly relevant for new lenders. This is the number of hard inquiries made by the lenders in the past after the individual applied for a loan or credit card. This number is an indication of the person’s credit discipline and therefore sheds light on whether the person can be trusted with a credit or not. Read more on Importance of CIBIL Report
What is CIBIL Score?
A CIBIL score, also known as the standard for credit score, is a 3-digit number that represents the credit trustworthiness of an individual. It is calculated by using your credit-related data that CIBIL collects from banks and financial institutions and is a crucial part of your overall CIBIL report.
CIBIL score are represented within the range of 300-900. A good CIBIL score which is considered ideal for loan applicants is 750 and above. Anything below this score is generally representative of poor credit history and discourages lenders from approving your loans.
Credit scores can be improved and maintained by following certain practices with your credit activities. These include swift payments of credit card bills and timely payments of your EMIs and avoiding too many loan applications with different lenders.
You can also check credit score by pan card
Difference Between CIBIL Score and CIBIL Report
Therefore, based on the above descriptions of the CIBIL score and CIBIL report, we can conclude that CIBIL scores are included in and are an essential component of CIBIL reports. Without a CIBIL report, there would be no CIBIL score. While a CIBIL score is a numerical representation of your overall credit history, the CIBIL report is a comprehensive and detailed account of the same.
However, with respect to new lenders, both your CIBIL score and CIBIL report would have a significant impact on whether or not your loan application gets accepted. Most lenders use specific CIBIL scores as an entry threshold for loan application consideration. Good CIBIL scores not only guarantee qualifying you for your desired loan but also come with other attractive features offered by most lenders. These benefits include lower interest rates, higher loan amounts, simpler documentation process and quicker approval times.
Once your CIBIL score qualifies for your desired loan, your CIBIL reports may also be reviewed to formulate a comprehensive idea of your spending behavior and credit trustworthiness. To ensure that your next credit application goes smoothly, it is recommended that you check your CIBIL report as well as your CIBIL score every 3 to 6 months.
In order to find out how your financial decisions can be improved to enhance your credit history, make sure to check out your CIBIL report on the Finserv MARKETS mobile app. Apart from your CIBIL score, your financial report on the Finserv MARKETS app also offers you a complete, personalized overview of your financial health and stability.
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