CIBIL is the first Indian credit info company. Credit info bureau limited is, popularly called CIBIL, that maintains credit records of every individual involved in the debt and loan market. Not just the individual but even the commercial entities are a part of this record. Such records are used by credit lending banks and companies to cross check your credit background.
Once you get into the world of debt, you are closely watched by experts. Each of your financial activities in the credit market is recorded under the CIBIL record. CIBIL score is like your school report card. If you maintain a good credit habit, you may have a strong credit score. CIBIL sets the score in the range of between 300 and 900. In case you are anywhere close to 900, then it means you are an excellent debtor. To know your score, you conduct a CIBIL check online.
Knowledge regarding CIBIL score is important not just for people with credit histories but even for those who have not placed an application for a loan or credit card yet. CIBIL score is a three-digit credit number generated by the Transunion credit bureau CIBIL based on your past credit info. This ranges anywhere between 300 and 900. The closer your credit score is to 900, the simpler it is for you to get credit from lenders.
A credit score usually is based on your past credit background. Credit defaults, how long you maintain a credit account, how you use the credits, check your credits etc., are major parameters that impact your CIBIL score. Now there are various myths linked with CIBIL. Few may be true, while the rest are pathetically incorrect. Listed here are 10 generic facts linked with CIBIL score –
∙ CIBIL score doesn’t involve investment or saving account info. It just tells you about your credit history and the debt activities that you perform. However, the score involves fixed deposits, trading, and current accounts.
∙ CIBIL will not allow you to know the purpose your credit score is used for. For instance, your credit score is used for your credit evaluation or for some other purpose. You will never ever know how your credit score is used.
∙ Many individuals think that evaluating credit scores might lower the score. It is a myth. Financial institutions and lending companies evaluate your credit score just if you are in need of credit. Checking your score or your loan status does not impact your credit score.
∙ Next misconception is that many individuals believe that in CIBIL, just negative scorers or bad debtors are found. CIBIL maintains the record of every individual involved in the credits market regardless of positive or negative image.
∙ In case you are a defaulter, then it may reflect in your credits score and will not publish any form of data linked with your name or such in the public forum or other platforms.
∙ In case you close an active or inactive credits account, it may be shown on your credits report. This might result in a high credits score or can even backfire on your credits score. Whatever may be the outcome, it will be shown on your credits score without stating any reason.
∙ You can just view three years of monthly history on your CIBIL score. Prior to this, you will not be able to view any kind of activity.
∙ CIBIL rank and CIBIL score aren’t interchangeable terms
Both CIBIL rank and CIBIL score terms are valid terms used by the TransUnion CIBIL. However, the CIBIL score term is applicable to individuals. On the contrary, credits rating is the term applicable to companies. CIBIL score ranges anywhere between 300 and 900. The closer your credits score is to 900, the better your chances of securing a loan. CIBIL rank ranges anywhere between 1 and 10. In the case of a company, the closer the rank is to 1, the better is the chances to avail of a loan.
∙ Credit score has nothing to do with investment or savings
Your CIBIL score is computed based on your past and existing credits activities. Your CIBIL credits information report (CIR) includes a summary of ongoing and previous credits accounts and linked credits activities. This does not involve info about other accounts like fixed deposits, trading accounts, savings accounts, current accounts, or investment accounts.
Your CIBIL score might not match the score generated by other bureaus
Credits scores generated by the TransUnion CIBIL and various other bureaus, namely Experian, CRIF High Mark, and Equifax, might or might not be the same with identical credits info. This is because every credits bureau uses its own scoring model to compute the credits score.
CIBIL does not delete or edit the info from your report directly
CIBIL generates your credits report based on the credits info that you receive from different credits sources like NBFCs and banks. They do not hold the authority to edit or delete your credits-linked info directly. They simply can update your report only when all changes are authorized and provided by the concerned credits source.
You can check your CIBIL innumerable times without hurting your credit score.
If individual enquiries regarding your CIBIL score from credits bureaus or via authorized 3rd party entities, it is known as a soft enquiry. Soft enquiries do not affect your CIBIL score. Your CIBIL score lowers when banks, creditors and credits card companies enquire regarding your credits report from credits bureaus, as it is a hard inquiry. Thus, ensure to avoid hard enquiries to the extent possible.
Having zero credit history does not infer you will have a great CIBIL score.
It is a common myth that an individual with zero credits history has a good CIBIL score. However, in actuality, an individual who has never availed a credits card or opted for a loan, may it be a personal loan or home loan, cannot take out their report from CIBIL. This is true not just for the CIBIL bureau but also for other bureaus as they hold no credits details from the issuer or lender to form a credits report and compute your credits score.
If you have been using your credits card and repaying your loan EMIs on time, then you may be anxious to know your credits score. To conduct a CIBIL score check free online by PAN number, you must visit the CIBIL website.