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Your Credit Score And It’s Implications

Having access to credit can be important, whether it is for purchasing a new home or a car or even applying for a new credit card. A good credit score can make all the difference. Let’s read more about it.

Who gives me my credit score?
Credit Information Bureau (India) Limited or CIBIL is responsible for assigning credit scores in India. CIBIL is a credit information company, which started operating in the year 2000 in India. Many banks and financial institutions, in order to ascertain your creditworthiness, use the CIBIL score.

What is a credit report?

CIBIL maintains records of loan repayments by customers of banks and other financial institutions. CIBIL generates monthly reports called Credit Information Reports (CIR) and credit scores. Lenders use credit scores to judge your capacity to repay when you apply for a new loan with them. If you have a sound history of repaying existing loans, chances are that you have a good credit score. CIBIL assigns you a 3-digit numeric score in order to summarise your credit history. Credit scoreis derived from your CIR and varies between 300 to 900. A high credit score implies that you are likely to repay the lender, while a low credit score may mean that a lender can decline your loan or credit card application.

Your credit report is important
Your credit report is important because lenders use it to determine whether or not you will get access to credit. Most lenders today prefer new customers who have a good credit score, usually more than 700. A favourable CIBIL report establishes without doubt that you are able to service all your outstanding loans effectively.



Errors in CIBIL reports

  • It is possible that you may find errors in your CIBIL report after you receive it. These errors can be:
  • Inaccurate Current Balance or Amount Overdue: It could be that the latest repayment instalment you have made may not have been accounted for in your CIBIL report. CIBIL reports are generated on a monthly basis. If you apply for your report, it reaches you after 45 days of purchasing it. In this situation, the chances of your latest loan instalment repayment missing, is very likely.
  • Inaccurate Current Balance: You should check if the current balance is accurate; an inaccurate current balance could impact a new loan application. You should also check for “Amount Overdue” in your credit report. Amount overdue indicates payments that were due but have not been made.
  • Incorrect Personal Details: Your personal details such as Name, Address, Date of Birth and PAN number are provided by your lenders to CIBIL. You should double check these in your credit report to ascertain if they are correct.
  • Ownership: Check to verify if the outstanding loans mentioned in your CIBIL credit report are actually yours.
  • Duplicate account: You should check if an account appears more than once in CIBIL.

Errors in Cibil Reports

Information you can dispute

You can dispute errors related to personal, account and ownership information. Duplicate accounts can also be dealt with using the dispute request. The following information can’t be disputed:

• Control Number
• Member Name (unless you are raising an ownership dispute)
• Account Number (unless you are raising an ownership dispute)
• Date Reported
• Enquiry Date

How to file a dispute request
If you find any mistakes, you should fill an online dispute form which is available at You will need a control number for this; the control number is a 9-digit number found on the top right hand side of your CIR. Once you submit the online dispute form, CIBIL will verify details with your lenders and financial institutions. If a genuine error is found, CIBIL will correct it and inform you about the current status of your dispute. You should receive notification within 30 days of filing the dispute. It is advisable that you apply for a new credit information report after rectifications if any have been made by CIBIL.
In conclusion
Your CIBIL report is an important document as it establishes your financial credibility. It gives lenders the confidence to loan money to individuals and brings transparency in the lending process.



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