written by | February 28, 2022

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Table of content


Table of content

What is a Credit Information Report?

Credit information reports determine lenders’ decisions when you apply for credit. A credit report and credit score is a good indicator of how likely they are to pay back the lender. Thus, keeping a good credit score is vital for better management of your finances.

Did you know? Your credit report can help you spot fraud!

All about Credit Information Report

A credit information report, or CIR, plays an important role in the lender's decision when you apply for credit. As a result, it's vital to regularly verify your credit information report to ensure it is accurate and up-to-date. A credit score and a credit information report are important indicators of a person's creditworthiness. A credit report is a credit bureau's detailed breakdown of an individual's credit history. Credit bureaus gather financial information about individuals and construct credit reports based on that data, which lenders use and other variables to make loan decisions.

Credit bureaus such as CIBILTM, Equifax, and Experian combine each individual's borrowings and credit history from various member credit institutions such as banks and NBFCs into a single report known as a CIR. It summarises an individual's prior repayment history as submitted by various member banks and financial organisations. You must monitor your CIR from time to time. There are many things you can do to improve your credit profile. A list of inquiries conducted on your account by various member banks/financial institutions/NBFCs to approve a credit facility is also included in the Credit Information Report (CIR).

Also read: What is Emergency Credit Line Guarantee Scheme (ECLGS)

Effect of CIR on a customer

The CIR has the biggest influence when applying for a new loan or credit card since it makes your credit record (or 'creditworthiness') visible to a lender. When a consumer applies for a credit card or a loan from a bank, the bank will examine their CIBIL Credit Score and CIR to evaluate their financial eligibility (i.e., will they be able to make his monthly payments on time?). The CIR contains details about all of their credit cards and loans and how they have been paying their instalments or dues. CIBIL receives monthly reports from banks detailing their customers' payment histories, making it easier for banks to assess their creditworthiness.

Lenders usually treat all loan applicants equally. If the lender's internal credit policy approves the application, each candidate will be charged the same interest rate for a certain loan size and purpose. To compensate for the possibility of a tiny part of the loans being defaulted on, the lenders would charge a higher interest rate to all borrowers.

The Credit Score and CIR can currently help lenders identify between people who have met their financial obligations on time and those who have defaulted. Lenders reward those who fulfil their responsibilities on time with "reputational collateral." As a result of this reputational collateral, individuals can obtain better conditions from lenders. As a result, before beginning a loan application, the customer should obtain and study the CIR (and Credit Score). It specifies what the lender will examine while evaluating the loan application, for starters. Second, any errors on the CIR must be discovered and corrected to minimise interruptions or delays in the loan appraisal process.

While a good score does not ensure loan acceptance, it does increase your chances of approval and allows you to manage your finances better.

Credit Information Report Format

The CIR contains all of the critical data that determines your creditworthiness. It contains information about your credit history, which you can use to track your credit history while applying or repaying a loan to NBFCs or banks. It keeps track of your lending EMI repayments and credit card payments month after month. It is devoid of any data about investments or savings. Housing loans, consumer lending, automotive loans, overdraft facilities, and other types of loans are all possible.

Also read: What are Debit, Credit Note and their Formats?

Other Information:

Member banks and financial institutions report personal details, date of birth, address, and identity numbers such as your PAN, passport number, voters' number, and telephone number.

Customer details like the type of credit utilised (loans, credit cards, etc. ), the loan/ credit limit, the current outstanding balance, the overdue amount, the number of days payment is past due, and the status (written off/ settled) are all available.

The number of bank enquiries'into your credit profile- When a lender requests CIBIL for your CIR- an "Enquiry" is created on your CIR (this usually happens when a consumer applies for credit).

Steps to Get Your Credit Information Report (CIR)

The significance of a credit report in a person's fiscal situation is undeniable. The Reserve Bank of India (RBI) made it mandatory for all four credit information companies in India (i.e., CIBIL, Equifax, CRIF High Mark, Experian) to provide one free credit report, including credit score, to individuals on request once a year (January-December) if their credit history is available with the CIC.

The free credit report is comprehensive and contains the same information that banks and other lending organisations receive. This practice is consistent with the global standard, which requires all credit bureaus to issue one free credit report each year. You can apply for a free full credit report from all the bureaus. 

To obtain a free credit report or credit score, go to the credit bureau's website and enter your date of birth, address, PAN (permanent account number) or Aadhaar number, identity evidence, and so on. Some credit bureaus will send you your report within 24 hours, while others will let you download it right away. It is critical to review the report and ensure that it is accurate. Individuals can use this to protect themselves from fraud and identity theft. They can review their reports and correct any inaccuracies by contacting a credit agency or a bank.

Here are the steps to get the free CIBIL credit report:

Step 1: Go to the CIBIL website.

Step 2: Complete the form with your relevant information, such as your name, phone number, and email address, and then click continue.

Step 3: Fill in the blanks with extra information about yourself, including your PAN (permanent account number). Make sure you enter your PAN correctly.

Step 4: Answer all of the questions concerning your loans and credit cards correctly, and your CIBIL score will be determined, as well as your full credit report.

How to Read Your Credit Information Report?

The CIR has all the vital information that define your creditworthiness. It details your credit history, which helps you track records when you are trying to avail a loan or when you repay the loan to NBFCs or banks. Your Credit Information Report is a complete report that contains information about your repayment history. The numerous financial institutions and member banks disclose the facts relevant to the individual contained in the report. It would help if you kept an eye on your CIR regularly. There are, however, a few things you must do to boost your credit score. It will provide accurate information on delinquent payments and timely payments.

The Credit Information Report is critical in assisting you in obtaining credit. As a result, you must understand your CIR. It is simply the lending institutions' information on your credit history to credit bureaus (also referred to as the credit information company).

Also read: What Are Debit and Credit? Bookkeeping Basics Explained

You are better equipped to manage your current and future financial situations if you thoroughly understand your credit history. As a result, having your Credit Information Report correct and updated regularly is essential because it makes it easier for banks to issue you loans. Always ensure that you repay your dues on time. Your credit score will automatically rise when you have a good repayment history. Given that, you are most likely to avail the best terms from lenders. Ensure that you repay your dues on credit card bills every time. Make it a point to check your Credit Information Report regularly.

What is Credit Information Score?

A credit score is a number that ranges from 300 to 850 and represents a person's creditworthiness. A borrower's credit score determines how they appear to prospective lenders. Your credit score is calculated based on the number of accounts you have open, the total amount of debt you owe, and your repayment history, among other factors. Lenders use credit scores to determine the possibility of an applicant repaying a loan on time.

The credit score model used by financial institutions was created by the Fair Isaac Corporation, also known as FICO. Several credit-scoring systems exist, but the FICO score is the most used. You can improve credit ratings in many ways, including timely loan repayment and keeping debt to a minimum.

How does Credit Score work?

The credit score has a big influence on how much money you have, and it has a significant impact on whether or not a lender will extend credit to you. Subprime borrowers, for example, are those who have a credit score of not more than 640. (i.e., the person with high credit risk). Lending institutions usually charge higher interest rates on subprime mortgages than normal mortgages to compensate for taking on more risk.

A credit score of 700 or better is considered good, and thus a borrower qualifies for a reduced interest rate.

Excellent is defined as a score of more than 800

The average FICO score range is as follows: -

  • Poor: 300 to 579
  • Fair: 580 to 669
  • Good: 670 to 739
  • Very Good: 740 to 799
  • Excellent: 800 to 850

A person's credit score may influence the size of the initial deposit required to acquire anything from a new smartphone, cable service, or utilities or to rent an apartment, among other things. Customers' credit scores are also scrutinised by lenders regularly, particularly when deciding whether to increase or decrease a credit card's interest rate or credit limit.

Also read: Everything You Need To Know About MIS Report

Conclusion

In this article, we talked about the importance of CIR and how you can maintain your credit score so that your creditworthiness is maintained.

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FAQs

Q: How do I correct information in a credit report put up against me?

Ans:

Please get in touch with the creditor from whom you obtained the loan and seek the revisions you require. The credit grantor will then notify CIBIL of the change, making the required changes.

Q: What is the source of information for CIBIL?

Ans:

To compile a genuinely comprehensive portrait of an entity's financial track record, CIBIL primarily obtains information from its members and supplements it with public domain data at a later stage.

Q: Who are Members of CIBIL?

Ans:

Members of CIBIL include banks, financial institutions, state financial corporations, non-banking financial corporations, housing finance companies, and credit card companies.

Q: What is a control number?

Ans:

A control number is a nine-digit number that CIBIL uses to keep track of your credit record. A control number is generated if and when banks access your credit record.

Q: What if you are 'credit hungry?'

Ans:

If you're in desperate need of cash and apply for credit from numerous lenders, it will lower your credit score because lenders will be hesitant to provide you with a new loan while reviewing your trustworthiness.

Q: Do late payments and heavy credit limit utilisation hurt credit scores?

Ans:

If you have missed payments on your loans in the past, your credit score very likely took a dip. A higher utilisation pattern means more repayments and, as a result, a worse credit score.

Q: Will using a credit card lower my credit score?

Ans:

If your old credit card has no outstanding balance, there's no need to be concerned about it and close it. If you have a credit card with good payment history, it will represent your good credit habits and keep your utilisation rate low, which will boost your credit score.

Q: What factors influence a high or low credit score?

Ans:

A good CIBIL credit score translates to a lower risk of default, and a low CIBIL credit score indicates a significant risk of default.

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The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.