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The article provides a clear distinction between the <keyword id="2054234" type="General" weightage="20" keywordseo="CIBIL-score" source="Orion">CIBIL score</keyword> and the <keyword id="2405124" type="General" weightage="20" keywordseo="CIBIL-report" source="Orion">CIBIL report</keyword>, which are important factors in assessing an individual's creditworthiness in India. Here's a summary of the key differences. CIBIL Score: <ul><li>Nature of Information: A numerical representation (ranging from 300 to 900) that reflects your creditworthiness.</li><li>Usage by Lenders: Used by lenders or lending institutions for swift credit risk evaluation.</li><li>Purpose: Serves as a quick reference point for lenders to assess an applicant's credit risk.</li><li>Impact on Lending Decisions: The CIBIL Score affects interest rates, credit limits, and the approval or decline of loan applications and credit card requests.</li></ul> CIBIL Report: <ul><li>Nature of Information: A detailed record of your credit history and overall financial behavior.</li><li>Usage by Lenders: Offers comprehensive insights for a meticulous credit assessment.</li><li>Purpose: Provides a thorough background for lenders, enabling a meticulous evaluation of an applicant's creditworthiness and financial responsibility.</li><li>Impact on Lending Decisions: The CIBIL Report paints a detailed picture, offering insights into an individual's financial behavior and credit management skills, guiding lenders to make well-informed decisions when extending credit.</li></ul> <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #d9d9e3 0.75pt;border-right:solid #d9d9e3 0.75pt;border-bottom:solid #d9d9e3 0.75pt;border-top:solid #d9d9e3 0.75pt;vertical-align:bottom;background-color:#f7f7f8;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Aspect </td><td style="border-left:solid #d9d9e3 0.75pt;border-right:solid #d9d9e3 0.75pt;border-bottom:solid #d9d9e3 0.75pt;border-top:solid #d9d9e3 0.75pt;vertical-align:bottom;background-color:#f7f7f8;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">CIBIL Score </td><td style="border-left:solid #d9d9e3 0.75pt;border-right:solid #d9d9e3 0.75pt;border-bottom:solid #d9d9e3 0.75pt;border-top:solid #d9d9e3 0.75pt;vertical-align:bottom;background-color:#f7f7f8;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">CIBIL Report </td></tr><tr><td style="border-left:solid #d9d9e3 0.75pt;border-right:solid #d9d9e3 0.75pt;border-bottom:solid #d9d9e3 0.75pt;border-top:solid #d9d9e3 0.75pt;vertical-align:middle;background-color:#f7f7f8;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nature of Information </td><td style="border-left:solid #d9d9e3 0.75pt;border-right:solid #d9d9e3 0.75pt;border-bottom:solid #d9d9e3 0.75pt;border-top:solid #d9d9e3 0.75pt;vertical-align:middle;background-color:#f7f7f8;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">A numerical representation (300-900) </td><td style="border-left:solid #d9d9e3 0.75pt;border-right:solid #d9d9e3 0.75pt;border-bottom:solid #d9d9e3 0.75pt;border-top:solid #d9d9e3 0.75pt;vertical-align:middle;background-color:#f7f7f8;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">A detailed record of credit history and financial behavior </td></tr><tr><td style="border-left:solid #d9d9e3 0.75pt;border-right:solid #d9d9e3 0.75pt;border-bottom:solid #d9d9e3 0.75pt;border-top:solid #d9d9e3 0.75pt;vertical-align:middle;background-color:#f7f7f8;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Usage by Lenders </td><td style="border-left:solid #d9d9e3 0.75pt;border-right:solid #d9d9e3 0.75pt;border-bottom:solid #d9d9e3 0.75pt;border-top:solid #d9d9e3 0.75pt;vertical-align:middle;background-color:#f7f7f8;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Used for quick credit risk assessment </td><td style="border-left:solid #d9d9e3 0.75pt;border-right:solid #d9d9e3 0.75pt;border-bottom:solid #d9d9e3 0.75pt;border-top:solid #d9d9e3 0.75pt;vertical-align:middle;background-color:#f7f7f8;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Offers comprehensive insights for meticulous credit assessment </td></tr><tr><td style="border-left:solid #d9d9e3 0.75pt;border-right:solid #d9d9e3 0.75pt;border-bottom:solid #d9d9e3 0.75pt;border-top:solid #d9d9e3 0.75pt;vertical-align:middle;background-color:#f7f7f8;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Purpose </td><td style="border-left:solid #d9d9e3 0.75pt;border-right:solid #d9d9e3 0.75pt;border-bottom:solid #d9d9e3 0.75pt;border-top:solid #d9d9e3 0.75pt;vertical-align:middle;background-color:#f7f7f8;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Quick reference point for lenders </td><td style="border-left:solid #d9d9e3 0.75pt;border-right:solid #d9d9e3 0.75pt;border-bottom:solid #d9d9e3 0.75pt;border-top:solid #d9d9e3 0.75pt;vertical-align:middle;background-color:#f7f7f8;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Provides a thorough background for lenders, enabling meticulous evaluation </td></tr><tr><td style="border-left:solid #d9d9e3 0.75pt;border-right:solid #d9d9e3 0.75pt;border-bottom:solid #d9d9e3 0.75pt;border-top:solid #d9d9e3 0.75pt;vertical-align:middle;background-color:#f7f7f8;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Impact on Lending Decisions </td><td style="border-left:solid #d9d9e3 0.75pt;border-right:solid #d9d9e3 0.75pt;border-bottom:solid #d9d9e3 0.75pt;border-top:solid #d9d9e3 0.75pt;vertical-align:middle;background-color:#f7f7f8;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Affects interest rates, credit limits, and approval/denial of loan and credit card applications </td><td style="border-left:solid #d9d9e3 0.75pt;border-right:solid #d9d9e3 0.75pt;border-bottom:solid #d9d9e3 0.75pt;border-top:solid #d9d9e3 0.75pt;vertical-align:middle;background-color:#f7f7f8;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Provides detailed insights into financial behavior and credit management skills, guiding informed lending decisions </td></tr></tbody><tbody></tbody></table>In summary, the CIBIL score is a concise numerical representation of creditworthiness, while the CIBIL report offers a comprehensive view of an individual's credit history and financial behavior. Both are essential for maintaining a healthy financial profile and making informed decisions about credit management. Regularly checking your CIBIL report can help identify errors, monitor credit behavior, and take steps to improve your credit score, ultimately enhancing your financial well-being.

CIBIL Score vs CIBIL Report - check out the differences

If you have ever been baffled by rejection of your <keyword id="6360217" type="PERSON" weightage="20" keywordseo="Loan">loan</keyword> application even though your <a href="http://www.businessinsider.in/Common-Mistakes-That-Can-Mess-Up-With-Our-CIBILReport/articleshow/45821762.cms">CIBIL report</a> has boasted of a high TransUnion Score, then you must read this! Here’s why you must go back and check your <a href="http://www.businessinsider.in/Word-of-caution-Add-on-credit-cards-canhamper-your-CIBIL-score-Know-how-you-can-avoid-it/articleshow/46985349.cms">CIBIL</a> report thoroughly. 
	 “An individual’s <keyword id="2405124" type="UNKNOWN" weightage="20" keywordseo="Cibil-Report">CIBIL Report</keyword> shows past 36 months of credit history. The <a href="http://www.businessinsider.in/Confused-about-your-credit-score-Know-how-your-CIBIL-TransUnionScore-is-calculated/articleshow/47785300.cms">CIBIL TransUnion Score</a> although is calculated based on 24 months of credit history,” says Harshala Chandorkar, senior vice-president of consumer services at CIBIL. 
	 
	She adds that if an individual’s credit report is based on his credit history of 36 months and if it reflects the status as ‘settled’ against any of his previous accounts during any point at that time, it impacts the applicant’s credit history. 
	 “Even though an individual may have a high <keyword id="728709" type="ORGANIZATION" weightage="20" keywordseo="CIBIL-TransUnion-Score">CIBIL TransUnion Score</keyword> owing to good and timely credit payment behavior in the past 24 months, his loan application gets evaluated based on his overall <a href="http://www.businessinsider.in/Heres-what-accessing-your-CIBIL-report-can-do-for-you/articleshow/48280411.cms">credit history</a> as reflected in the report,” she explains. 
	 
	However, the good news is that a ‘settled’ status may not necessarily have an adverse impact on the individual’s loan application. Chandorkar noted that each bank has its own policy to view ‘settled’ status in a CIBIL report. 
	 
	“However if the customer has fully paid the dues and the loan provider has closed this account then the status should reflect as "Closed" in the customer’s credit report,” she notes. 
	 
	So in such a scenario, what should one do? Harshala Chandorkar tells us that an applicant must follow close that account in order to get his CIBIL report in order. 
	 
	“A “Settled” status on the credit report cannot be changed unless the customer pays back all the dues and the loan or credit card is closed. Hence, it is advisable to approach the bank or the credit card company and offer to fully pay all the accrued dues and penalties if any and close the credit card or loan,” suggests Chandorkar. 
	 
	Once, the above mentioned steps are followed and the dues are paid in full, the status changes from ‘settled’ to ‘closed’. The lending institution updates your data, which is then reflected in your CIBIL report. 
	 
	So, if you plan to apply for a loan, make sure you go through CIBIL report well and get everything in order to get the best deal!

Loan rejected despite a good CIBIL TransUnion Score? Check your CIBIL
report again!

You have been told time and again that your <keyword id="2054234" type="UNKNOWN" weightage="20" keywordseo="CIBIL-Score">CIBIL score</keyword> should be above 750, if you want to access timely credit. But is all this hype about keeping CIBIL score high creating pressure on you, so much so that you are living in fear due to your CIBIL score? If yes, this is just what you need to read today. 
 You often hear that your loan application may get rejected if you fall short on your CIBIL score. As a result, you are so scared, that despite knowing that you must request for your CIBIL score at least once a year, you keep postponing it. You postpone it because you are scared to find out what you may see and what impact it may have on your plans to avail of <keyword id="6354730" type="UNKNOWN" weightage="20" keywordseo="Home-loan">home loan</keyword> or any other credit. 
 
If you are nodding in agreement, here are few things to do to dispel your fears about your CIBIL score. 
 
Catch the bull by its horns 
 
Yes, you heard that right! You need to face your fears, by pulling out your CIBIL report. It is a fairly easy process and you will receive your report right away on your email after you have gone through the steps as mentioned on the CIBIL website and paid the fee required to access your report. Once that is done, you need to take a close look at your CIBIL score. Needless to say, if it is close to 900 mark you have little to worry about. If it is below the satisfactory level of 750, do not panic! You need to keep your head above your shoulders and find out exactly what has been pulling down your CIBIL score. 
 
Chalk out a plan 
 
If your CIBIL score is low because you have not made regular repayments on your credit card or some other loan, fix that immediately. Examine your finances and see where you can cut corners. If possible, try and liquidate some assets to repay your credit card debt first. Credit card debt is the most expensive form of debt that you are servicing and the rate of interest you are paying on it can be as high as 38-40%. Once you have repaid this debt, ensure that you do not repeat the mistake. 
 
Raise a dispute, if necessary 
 
If your CIBIL score is low even after you have maintained an impeccable repayment track record, check if there is something amiss in your CIBIL report. For instance, you may have closed a loan account from your end successfully, but the bank in question has not forwarded the relevant details to CIBIL. As a result, your CIBIL score is taking a beating for no fault of yours. In such cases, raise a dispute with CIBIL right away. CIBIL has an efficient grievance redressal mechanism that will resolve your issue after it has verified the relevant details with the lender in question. Once your dispute has been resolved, your score will be restored to normal within a short while. 
 
Relax! It’s just a number 
 
At the end of the day, your CIBIL score is a yardstick of your financial health. Of course, you must make an attempt to keep it high, but don’t revolve your life around it. Instead try and build up healthy financial habits. First things first, draw up a financial plan, save for emergencies, buy adequate insurance cover and invest your surplus. As far as credit is concerned, don’t reach for the moon right away. Start small with a credit card and make purchases that you can repay in a single billing cycle. 
 
Also inculcate other good credit habits such as keeping your utilization levels under 30%. If you follow these good financial habits, your 
CIBIL score will automatically get a boost. The moot point we are trying to make here is that your CIBIL score is a reflection of your financial habits, so work on getting them right first. 
 
(Rajiv Raj is the Director and Co-Founder of <a href="http://www.creditvidya.com/">www.creditvidya.com</a>) 
 
(Image: ThinkStock)

Dispel all your fears due to CIBIL score. Here’s how

If you are planning to buy property now or in the near future, you know by now that maintaining a good <keyword id="2054234" type="UNKNOWN" weightage="20" keywordseo="CIBIL-Score">CIBIL score</keyword> is of utmost importance. With RBI having made CIBIL score assessment mandatory, most commercial banks in India are unlikely to consider people with a CIBIL score below 750 (out of 900) for a <keyword id="6354730" type="UNKNOWN" weightage="20" keywordseo="Home-loan">home loan</keyword>. 
 
In case your CIBIL score is unsatisfactory, here are five things to do if things are not in your favor for a home loan application. 
 
Check for errors in the report 
 
Even after maintaining a good credit behavior you find that your CIBIL score is low, check your CIBIL report for errors. Sometimes discrepancies can appear on your CIBIL report for no fault of yours. There can be wrong information about an overdue loan that has been closed from your end, or a mix up of identity that may have occurred when the bank was passing on your credit information to CIBIL. If you spot such an error, you need to approach CIBIL with a request for the rectification of the same. This is called raising a “dispute request”. 
 
CIBIL will then route your request to the Dispute Resolution Department. This team will then analyze the error and resolve it with the help of the relevant bank, which has given the said information to CIBIL. Once the issue is resolved, the updated information is put up on your credit report in approximately a month’s time. After the dispute resolution process is complete, you can make your home loan application. 
 
Make an infallible repayment plan 
 
If there are no errors in your CIBIL report and your credit score is low due to bad payment history, you have no choice but to rectify it. Here’s what you can do to get your CIBIL score back in order. 
 
· Start by tackling the costliest debt. 
· If it is credit card debt which is your pain point, clear out all your dues at once. 
· If need be consider liquidating some other assets to pay off your credit card dues 
· Don’t cancel your credit card. Keep usage on hold for a while, and ensure that the utilization is under 20%. 
· Make bill payments on credit cards well before the due date. 
 
You may have to cut down on some expenses and get into strict financial discipline to achieve this goal, but unless you do it, there is no way you can improve your CIBIL score. 
 
Consider co-applying with your spouse or parent 
 
If you have to take a home loan and there is no choice, despite a poor credit score, you can consider co-applying with your spouse if she has a good credit score. You may also consider taking a loan with your father if he is still working and has an impeccable credit history. 
 
Put down a higher down payment 
 
If you have set your heart on a property and are not willing to let go of it no matter what, you can also consider putting a higher down payment of more than 20% of the purchase price. Your bank may be willing it lend if you show some credibility on that front but may still offer you a loan that may be a higher rate of interest than the prevailing rates in the markets. 
 
Approach a smaller bank 
 The largest commercial banks may not be willing to give you a home loan with a <keyword id="3255932" type="UNKNOWN" weightage="20" keywordseo="poor-CIBIL-score">poor CIBIL score</keyword>, but there are regional rural banks, co-operative banks or even family banks that may still be willing to give you a home loan with a poor CIBIL score. Of course the interest rates may be higher in such banks and the paperwork and application process may be much more elaborate, but you may just able to get a loan out of such banks, even with an unflattering CIBIL score. 
 
Stay on rent a little while longer 
 It’s great to dream about having your own home, but there are literally a million expenses you have to think about when you actually go about buying one. Taking on a <keyword id="6500467" type="ORGANIZATION" weightage="20" keywordseo="mortgage">mortgage</keyword> with a poor credit score will escalate your costs further. Considering all of this, it may make better sense for you to stay on rent for a little while longer and save up a little more for your own home. You can concentrate on improving your credit score in the meanwhile. 
 
A poor CIBIL score just before you apply for a mortgage can indeed be troublesome, but you need not lament about it because it is not something that will stick to you forever. All you have to do is get into a strict financial regimen and get your credit history back on track in order to get your CIBIL score in order before you make a fresh application for a mortgage. 
 
 
(Rajiv Raj is the Director and Co-Founder of www.creditvidya.com) 
 
(Image: ThinkStock)

Six hacks to tackle low CIBIL score before making a home loan application

If you are tempted by calls for <keyword id="6368202" type="ORGANIZATION" weightage="20" keywordseo="Credit-card">credit card</keyword>s with different schemes, hold that thought for a moment! Before you sign up the document for yet another new credit card, have you ever wondered how is your credit limit decided and if you have the room to raise it later? 
	 
	“When you sign up for a credit card you are requested to fill up a form providing details of your income, KYC and employment. Based on the details you provide the credit card company first checks your <a href="http://www.businessinsider.in/Not-sure-what-your-credit-report-shows-Heres-whatit-means/articleshow/49092557.cms">CIBIL TransUnion Score</a> and <a href="http://www.businessinsider.in/Loan-rejected-despite-a-good-CIBIL-TransUnion-Score-Check-your-CIBILreport-again/articleshow/48541388.cms">CIBIL Report</a> to assess your credit history and past credit behavior,” says Harshala Chandorkar, COO, <keyword id="6380215" type="ORGANIZATION" weightage="20" keywordseo="CIBIL">CIBIL</keyword>. 
	 
	She adds, “If your <keyword id="728709" type="ORGANIZATION" weightage="20" keywordseo="CIBIL-TransUnion-Score">CIBIL TransUnion Score</keyword> meets the cut-off limit of the credit card company and they are satisfied with your <a href="http://www.businessinsider.in/Heres-what-accessing-your-CIBIL-report-can-do-for-you/articleshow/48280411.cms">CIBIL Report</a>, they proceed to decide your credit card limit, rate of interest and terms and conditions on your card.” 
	 
	It must be noted that while each credit card company follows its own set of criteria for deciding on the credit card limit, the credit limit is primarily a function of an individual’s income and usage. 
	 
	Chandorkar explains that the crucial factor that determines the credit limit for a credit card include-- income documents such as salary slips, income tax return documents and surrogate methods which include your association with a brand, a merchant outlet or a premium club. But apart from the income, a credit card company before fixing the limit of the credit card also takes your credit history and credit score into account. 
	 
	This is primarily done in order to understand your repaying ability. If your credit score is low, your credit card limit would also be low. And if you have a higher limit, you can swipe your card a little liberally without worrying about your card being declined. 
	 
	For instance, you may have an income of Rs 60,000 per month. However, the limit on your on your credit card could be just Rs 1 lakh. If you have been wondering why your limit is so less as compared to your income, then you should probably check your credit history and your credit score once again. 
	 
	We know what are you thinking now. You probably want to know if you can raise the limit on your cards. And the answer is a definite yes. 
	“Most banks make you eligible for getting an increase on your credit card limit after 6-18 months of you availing and using the credit card, depending upon their credit policy,” says Chandorkar. 
	 However, credit card companies do not increase the limit without their own assessment of your credit behaviour. According to Chandorkar, the raise in credit limit for a card depends primarily on two factors—your payment history for that particular credit card and your payment pattern for other credit relationships, which is reflected in your <keyword id="2405124" type="UNKNOWN" weightage="20" keywordseo="Cibil-Report">CIBIL Report</keyword> and CIBIL Transunion Score. 
	 
	If the banks or the credit card company finds your overall credit behaviour satisfactory, it will allow you to up your credit limit. 
	 
	But the catch here is that while the banks can increase the limit on your credit card, they also have the power to reduce it, if need be. Chandorkar points out that banks and credit card companies often do it when they find an individual’s credit behaviour hinting at a possible default or delinquency on loan and credit card payments. 
	 
	One must remember that credit card issuers regularly keep a tab on their customer portfolio and constantly check for their borrower’s credit behaviors. Well, this just leaves us with one advice-- Spend wisely and stay safe!

High income but low credit card limit? Here’s why your bank doesn’t
want to give you more

The first month of 2016 is about to get over and its time to look back and analyse your financial behaviour. 
	 
	“Advent of 2016 signals new hopes and aspirations along with resolutions for fulfilling these aspirations. Here are 7 resolutions you must commit to if you want to enjoy credit happiness and <a href="http://www.businessinsider.in/Is-this-what-2016-holds-for-startups-in-India/articleshow/50549936.cms">easy access to finance</a> in the New Year by maintaining a healthy credit report and high credit score,” says Harshala Chandorkar, COO, <keyword id="6380215" type="ORGANIZATION" weightage="20" keywordseo="CIBIL">CIBIL</keyword>. 
	 
	Timely payment of loans 
	 
	Ensure that you are paying of your EMIs and credit card bills on time. Always have enough balance in the bank in order to make timely disbursements. 
	 
	“In case you are making payments through cheque each month ensure that the check is deposited in advance before the due date of the EMI payment. Similarly also make sure that you pay credit card bills on time each month. Try to make the credit card bill payments in full each month to avoid accumulation of debt and interest charges,” says Chandorkar. 
	 
	If making full payments isn’t possible, it is suggested that one should at least make part payments in order to avoid default tag. “Missing any EMI or credit card bill payment will impact your credit report and lower your credit score,” she notes. 
	 
	Restrict credit card limits: 
	 “While increased spending on your credit cards may not necessarily negatively affect your <keyword id="728709" type="ORGANIZATION" weightage="20" keywordseo="CIBIL-TransUnion-Score">CIBIL TransUnion Score</keyword>, an increase in the current balance on the card over time is an indication of an increased repayment burden and may negatively impact your score. It’s always prudent to not use too much credit,” says Chandorkar. 
	 
	Limit credit exposure 
	 
	“The total size of your debt reflects on your <a href="http://www.businessinsider.in/Wanteasy-access-to-credit-for-your-startup-Here-are-a-few-tips-/articleshow/50743156.cms">credit</a> report and has an impact on your CIBIL TransUnion Score. Having many loans or credit cards increases the total amount of debt you owe and increases your credit exposure. High credit exposure may impact your CIBIL TransUnion Score. If you have many loans running ensure that you close some of them so that your total credit exposure is reduced, before you apply for new loans,” she adds. 
	 
	Monitor your co-signed, joint accounts 
	 
	It is important to regularly monitor all your loan accounts which include co-signed, joint and the ones for which you have signed up as a guarantor. It is also important to understand that by pledging as a guarantor on the loan, you are also legally responsible towards the timely repayment of the loan. In case of defaults and delinquencies by the principal borrower, the CIBIL TransUnion Score of the guarantor will also get negatively impacted. Hence, it’s imperative that the guarantor on the loan should ensure that the borrower pays the EMIs regularly on the due date, month on month. 
	 
	Know your CIBIL TransUnion Score 
	 It is important to keep a tab on your <keyword id="88181" type="UNKNOWN" weightage="20" keywordseo="credit-history">credit history</keyword> regularly in order to track your financial standing and be “loan ready” always. Remember responsible credit behavior is the cornerstone of financial independence. In order to enjoy financial freedom and access to credit you must ensure responsible credit behavior and due diligence.

4 credit management resolutions that you must make in this new year!

We have always stressed on how a good credit history is important for accessing <a href="http://www.businessinsider.in/4Tips-to-manage-your-financial-goals/articleshow/47468847.cms">financial</a> help. But if you still feel that applying for a loan is an easy job and you have all the documents in place, hold that thought for a moment. BI India now list down 5 reasons why you should access your <keyword id="2405124" type="UNKNOWN" weightage="20" keywordseo="Cibil-Report">CIBIL report</keyword> and <keyword id="728709" type="ORGANIZATION" weightage="20" keywordseo="CIBIL-TransUnion-Score">CIBIL TransUnion Score</keyword> before you apply for a loan. 
	 “Your <keyword id="6380215" type="ORGANIZATION" weightage="20" keywordseo="CIBIL">CIBIL</keyword> Report and <a href="http://www.businessinsider.in/Confused-about-your-credit-score-Know-how-your-CIBIL-TransUnionScore-is-calculated/articleshow/47785300.cms">CIBIL Transunion</a> Score provides a testimony of your financial discipline to banks and financial institutions for approval of your loan or credit card application. A healthy CIBIL Report and a high CIBIL TransUnion Score indicates that you are managing your loans and credit relationships well and are financially savvy,” says <keyword id="1801472" type="PERSON" weightage="20" keywordseo="Harshala-Chandorkar">Harshala Chandorkar</keyword>, senior vice president – Consumers Services and Communications at CIBIL. 
	 
	You are always ‘loan ready’ 
	 
	“Along with your income to debt ratio, your credit history as reflected in your <a href="http://www.businessinsider.in/Straigten-up-You-have-a-bad-credit-behavior-if-you-are-doing-anyof-these/articleshow/47617149.cms">CIBIL Report</a> is a vital parameter for the approval of your <a href="http://www.businessinsider.in/Dont-be-a-guarantor-unless-you-knowthese/articleshow/48097607.cms">loan </a>application. It is important to do your homework and assess your credit eligibility before applying for a loan. Along with calculating your income to debt ratio you should also be aware of your credit history and credit score. Therefore before applying for a loan or credit card you must access your CIBIL Report and CIBIL TransUnion Score and understand its components so that you do not face any unpleasant surprises in the form of loan rejection because of low CIBIL TransUnion Score,” says Chandorkar. 
	 
	Manage your accounts 
	 
	A CIBIL report helps you keep a tab on your loan and credit card accounts. “It is a useful tool to monitor performance on all your loans - be it loans that you have availed, guaranteed or co-applied. It also provides you a snapshot of your credit cards- the ones you own and the ones you may have provided to your spouse or children as add on credit card, she adds. 
	 
	Ensure correct information 
	 
	Accessing your CIBIL report on time will allow you verify if your credit history is accurate or if there is any discrepancies in you report. “If you find any discrepancies in the information on your report you can always get it corrected by approaching CIBIL through its online dispute resolution forum. CIBIL can also help you resolve any discrepancies or disputes on your credit report through the online dispute resolution process on our website,” notes Chandorkar. 
	 
	Credit Health Check Up 
	 
	“Just like your regular health check you must also run a financial health check up to be in control of your financial stability. Reviewing your CIBIL Report will provide you insights into your financial health with reference to your credit exposure- how much debt do you hold?, how have you being repaying your loan <a href="http://www.businessinsider.in/Knowhow-a-good-credit-score-can-help-you-avail-instant-finance-at-electronic-stores/articleshow/47277522.cms">EMIs</a> and credit card bills?, how many times have you applied for a loan or credit card? Do you have detrimental flags like “Settled”, “Written-Off” or “Suit Filed” against any of your loan accounts or credit cards?. This credit health checkup will help you take corrective and preventive measures in time for maintaining financial hygiene and a healthy credit report,” she suggests. 
	 
	Better negotiations 
	 
	Accessing your CIBIL report helps you in negotiating the terms and conditions with your lender. According to Chandorkar, banks and lenders now increasingly rely on CIBIL Report and CIBIL TransUnion Score to decide if the loan should be approved. “The consumer can use this powerful reputational collateral to his or her advantage. Accessing you CIBIL Report before applying for the loan may give you better negotiating power with the lending institution for availing the loan at better terms and conditions, if you have a high credit score and a healthy CIBIL Report,” she states.

Here's what accessing your CIBIL report can do for you!

We have talked about how <keyword id="6380215" type="ORGANIZATION" weightage="20" keywordseo="CIBIL">CIBIL</keyword>’s TransUnion score can make or break your financial viability while applying for a <keyword id="6360217" type="PERSON" weightage="20" keywordseo="Loan">loan</keyword>. But ever wondered how is your credit score calculated? 
	 
	According to Harshala Chandorkar, senior vice president- consumer services and communication, CIBIL, while preparing the credit score, emphasis is laid on three major pointers—past financial performance, credit exposure and credit type and duration. 
	 “While calculating a person’s <keyword id="728709" type="ORGANIZATION" weightage="20" keywordseo="CIBIL-TransUnion-Score">CIBIL TransUnion Score</keyword>, 30% emphasis is given on the past performance while 25% each is laid on credit exposure and credit type and duration. Remaining 20% comprises of other factors,” said Chandorkar. Other factors include the credit utilization, recent credit behavior which comprises the remaining 20% of the score. 
	 
	So, how exactly is this CIBIL TransUnion Score calculated? One must remember that an individual with a credit score of 750 and above are generally considered financially healthy by credit institutions. 
	 
	“Your CIBIL TransUnion Score is calculated based on the information in the “Accounts” and “Enquiry” section of your CIBIL Report. The score is calculated based on how much credit is the consumer using or how many accounts are past due and by how many days?” she explained. 
	 
	In terms of the ‘trade attributes’, CIBIL takes into account whether the individual has the right mix of credit. For instance, if a consumer relies heavily on credit cards, his score will be comparatively lower than someone who uses credit cards up to a certain limit. 
	 
	Chandorkar noted that these factors are taken into consideration while preparing an individual’s credit report as these factors determine the person’s chances of defaulting on a loan if he gets one. 
	 
	A strong past credit performance strengthens an individual’s financial credibility while the type of loan taken by an individual—secured or unsecured loan helps a bank determine the risks involved in extending a loan to the person. 
	 
	It should be noted that CIBIL Report and CIBIL TransUnion Score are not pointers to whether your loan application gets approved but also plays a pivotal role in laying down the terms and conditions on which you can avail the loan. 
	 
	“The higher the credit score, the better your chances of availing the loan faster and on favorable terms. It is advisable to check your CIBIL Report and CIBIL TransUnion Score before applying for a loan. Timely payment of EMIs is most important for maintaining a good credit history and a healthy credit score,” reiterated Chandorkar.

Confused about your credit score? Know how your CIBIL TransUnion
Score is calculated!

We gave you a few tips to remember before you became the <keyword id="661336" type="UNKNOWN" weightage="20" keywordseo="guarantor">guarantor</keyword> for a third party’s <keyword id="6360217" type="PERSON" weightage="20" keywordseo="Loan">loan</keyword>. Now, BI India shares a few more do’s and don’t’s you must keep in mind before guarantying a loan. 
	 
	Check third party’s credibility 
	 
	If you have been approached by someone to sign up as a guarantor, it is always advisable to learn about the person’s credit history. For instance, if the person has defaulted in his payments before, it is best not be the guarantor. There is nothing wrong in asking one his CIBIL credit score if he has approached you to be his guarantor. 
	 
	Read the document 
	 
	In India, matters related to money are based on trust. So, when you agree to be a guarantor for your relative or a dear friend, ensure you have read the terms and conditions specified in the loan agreement. Understand under what circumstances will you be liable to pay and how much of it is your responsibility. 
	 
	“Read and understand the nature of the guarantee. A prospective guarantor must not sign a document that he has not read or sign a document which is in fact a blank form or a partially completed form. You may seek legal advice on the legal implications of the guarantee before signing,” Harshala Chandorkar, senior vice president- Consumer Services and Communications at CIBIL tells BI India. 
	 
	Check your credit score 
	 Before you sign up as a guarantor, check you CIBIL score. If you are trying to improve your credit score or have loans against your names, its best to politely decline the request. Chandorkar says that it is advisable to check your <keyword id="2405124" type="UNKNOWN" weightage="20" keywordseo="Cibil-Report">CIBIL report</keyword> and <keyword id="728709" type="ORGANIZATION" weightage="20" keywordseo="CIBIL-TransUnion-Score">CIBIL TransUnion Score</keyword> before guarantying the loan in order to assess you credit standing prior to taking additional responsibility. Too many credits along with an additional third party loan may spoil your credit score. 
	 
	Do not sign if not comfortable 
	 
	If you are uncomfortable with a certain clause in the loan agreement, it is advisable to put your foot down and express your disagreement. Ensure you have a clear understanding of all the clauses as in event of default or death, the third party loan could become your responsibility. 
	 
	Do not share your details 
	 
	If you are becoming a guarantor to a third party, who is taking a loan from an individual or lesser know lender, then its best not to share your information with them. “Be cautious about giving a photocopy of your identity card or passport to anyone other than the financial institution,” she adds. Also, ensure, you get a copy of all the relevant documents of the loan, you have signed up as a guarantor for.

Don’t be a guarantor unless you know
these!

Your <keyword id="2054234" type="UNKNOWN" weightage="20" keywordseo="CIBIL-Score">CIBIL score</keyword> is a measure of your financial health. A good <keyword id="2405124" type="UNKNOWN" weightage="20" keywordseo="Cibil-Report">CIBIL report</keyword> and CIBIL score of 750 and above can help you get easy access to <keyword id="6354680" type="ORGANIZATION" weightage="20" keywordseo="credit">credit</keyword>. But did you ever wonder how the CIBIL score is calculated, or what are the factors that may take it downhill? Here are six things that you must know about CIBIL. 
 
How is your CIBIL score calculated? 
First, you need to know the components of the CIBIL score and the weightage they carry. 
· The pattern you follow in paying off your credit card and loan EMIs has the highest weightage of 35% and thus is the most important factor impacting your CIBIL score. 
· Next comes the “credit utilisation” that carries a weightage of 30%. Credit utilisation ratio is arrived at by calculating the balance outstanding on your existing cards as a percentage of the total credit limit on all your cards. 
· The third factor carrying a weightage of 15% is the “length of credit” or how long have you been servicing debt. 
· The number of “hard inquiries” on your CIBIL report has a 10% weightage on your CIBIL score. Every time you apply for a new loan or a credit card, it gets registered in CIBIL as a hard inquiry and shaves off a few points from your CIBIL score. 
· Lastly bearing a 10% weightage on your CIBIL score is the “mix of credit”. A healthy mix of secured and unsecured credit, will have a positive bearing on your CIBIL score. 
 
Now that you know what goes into the calculation of your CIBIL score, here a few mistakes you need to avoid to keep your CIBIL score intact. 
 
Making late payments It doesn’t matter how many <keyword id="6387037" type="UNKNOWN" weightage="20" keywordseo="credit-cards">credit cards</keyword> you own, but if you develop a habit of not paying the total outstanding amount within the billing cycle, you may be heading towards a disaster. Ensure that you spend judiciously and make all credit card repayments on time. The same holds true for loans, missing even one repayment can bring your CIBIL score down substantially. 
 
Exceeding credit utilisation above 30% 
Having a higher limit on your credit card, doesn’t mean that you have to use it completely. This ways, you’ll be inviting an overwhelming debt trap, as a higher credit utilisation means that more points being knocked off your CIBIL score. Therefore, keep a conscious check to see that your credit utilisation remains under 30% at all times. 
 
Closing old credit cards Do not commit the mistake of closing a credit card that was given to you by your parents once you are proficient enough to own a bunch of cards yourself. The reason being that if the card carries you name, it means that CIBIL has been recording your <keyword id="2490224" type="UNKNOWN" weightage="20" keywordseo="repayment-history">repayment history</keyword> (assuming that your Mom or Dad have been footing the bill for the same). You simply need to ensure that you have cleared the balances as this will help you gain brownie points for maintaining good credit history. 
 
Appearing credit hungry 
We are often credit card issuers and money lender to avail easy credit, but one should try to escape as much as possible unless you are in dire need of it. Applying for too many credit cards or loans will make you appear credit hungry and a considerable number of enquiries on your CIBIL report will bring your CIBIL score down. 
 
Not having the right credit mix If you are thinking that you are better off not availing credit at all, you are wrong. In fact, it makes a lender wary because he can’t access your credit history to asses you. On the other hand, what adds on to your CIBIL score is having a good mix of credit such as a home loan, car loan, a <keyword id="180660" type="UNKNOWN" weightage="20" keywordseo="personal-loan">personal loan</keyword>, etc. along with a maximum of two or three credit cards. Remember, the crux of maintaining a good CIBIL score is to use credit responsibly. If you are aware of your spending habits and are making timely repayments, you have little to worry about! 
 
(Image: Thinkstock) 
 

(About the author: Rajiv Raj is the director and co-founder of <a href="http://www.creditvidya.com/">www.creditvidya.com</a>)

6 things about CIBIL every young adult should know

Ever wondered how you can afford that 5 star air conditioner or that expensive washing machine in the electronics store? Well, you may have thought of taking a loan from friend or a family member. But did you know a good credit score could help you avail a loan at an electronics store instantly. 
	 “It is important to understand that a good <keyword id="6380215" type="ORGANIZATION" weightage="20" keywordseo="CIBIL">CIBIL</keyword> Report and <keyword id="728709" type="ORGANIZATION" weightage="20" keywordseo="CIBIL-TransUnion-Score">CIBIL TransUnion Score</keyword> is very critical for having access to finance when you need it. With availability of instant credit information and score from CIBIL, finance companies are able to assess an applicant’s credit discipline and are able to sanction the loan immediately. A good CIBIL report and high CIBIL TransUnion Score can be your gateway to building a prosperous future,” said Harshala Chandorkar, senior vice president, Consumer Services &amp; Communications, CIBIL. 
	 
	She tells BI India some basic tips that will help maintain a good CIBIL TransUnion Score and will ensure easy access to finances whenever required. 
	 
	Keep track of EMIs and credit cards 
	 
	“Keep a regular check on all the loans and credit cards and ensure to make payments on them before the due date month-on-month,” suggested Chandorkar. 
	 
	Set payment alerts 
	 
	She also advises that in order to better manage payments of credit card bills, one should set up an alerts that can constantly remind you of the dues. 
	 
	Guaranteed loans: 
	 
	Its always best to keep track of your guaranteed loans and make timely payments. “The guarantors CIBIL TransUnion Score gets impacted if there is a delinquency or default on the loan repayments by the principal borrower,” she said. 
	 
	Review CIBIL Report and CIBIL Transunion Score 
	 
	Before applying for any loan, credit card or finance for electronic goods ensure to check your CIBIL Report and CIBIL TransUnion Score. This practice will help you avoid any unpleasant circumstances in the form of loan rejection. You can always work towards improving your credit history and CIBIL TransUnion Score in case it is low and apply for loans or finance opportunities once it improves.

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