Why your CIBIL report is a summary of your financial health?

Easy and quick access to finance in the form of loans and credit cards is vital for fulfilling life goals and aspirations. A good credit score and credit report along with income and employment are the fundamental factors for assured, easy and quick access to loans and credit cards. Your CIBIL Report represents the health of your financial behavior. It shows a month on month record of the payments on your loan EMIs and credit card bills and indicates whether you have been paying on time or not . It helps the credit institutions to check the three vital parameters of your financial health –

Credit Leverage: Your credit report showcases to the credit institutions your credit exposure.
- How many loans and credit cards have you availed?
- What is the type of credit you have availed – Secured (Home Loans, Car Loans, Loan against Property) and Unsecured (Personal Loan, Credit Card)
- What is the composition of Secured vs. unsecured credit?
- How much is the total amount of credit you have taken?

Credit Behavior: Your CIBIL Report reflects your credit behavior on how you are servicing your loans and credit cards:
- Have you been making payments on your loan EMIs and credit card bills on time?
- If you have defaulted on payments then by how many days? What is the current status of your loan account?
- Have you ever made settlements on your credit card bills?

Credit Appetite: Another crucial question which your credit report helps answer is whether to approve your loan or not and how much credit can you comfortably manage:
- How much credit you have already taken and what is your existing debt burden?
- Whether you can manage additional credit based on your income to debt ratio. How much additional debt can be given to you?

Here are the different sections of the CIBIL Score and Report and what they contain:

- CIBIL Score: This displays your current credit score. Your credit score is calculated based on your credit behavior that is reflected in the “Accounts” and “Enquiry” sections of your credit report. Your credit score ranges between 300 and 900

- Personal Information - This is the information that identifies you. This includes your name, date of birth, gender and other details like PAN, passport, driver license, voter ID etc

- Contact Information: Your present and past addresses, telephone numbers, mobile numbers, email addresses, etc appear in this section. The most recently reported information will appear first

- Employment Information: These sections contain your personal details as provided to TransUnion CIBIL by lenders. The most recently reported information on an individual’s occupation, income and employment as given at the time of application is displayed here

- Account Information: This is the most important section on your credit report. This section provides a comprehensive snapshot of all your credit relationships along with a month-on-month record of up to 36 months of your repayments.

1) It contains the name of the banks and financial institutions that have provided you loan or credit card
2) The type of credit facilities you have availed like home loan, auto loan, credit card and so on
3) The ownership of the loans that is whether the loans are single, jointly held or is in capacity of a guarantor to a loan
4) Opening date of each loan account, loan amount, date of the last payment made, current balance, amount overdue, days past due date.
5) Status of the loan account- Indicates whether the loan account has been “Written Off”, “Settled”, “Suit Filed” etc, as reported by the credit institution. In short, this section reflects the existing status of the loan account in case there has been a default on the loan payment.
- Enquiry Information: This section is simply a list of the lenders that have viewed your credit report for assessment of your loan application. It shows the name of the lender, date of enquiry and the type and size of loan that you applied for. Enquiries are added to your report when you apply for a loan or a credit card and the lender accesses your CIBIL credit report.

Besides the above there are a few technical terms and abbreviations in your report:

- ‘000’ indicates no days past due for that particular month and implies that you have been regular with the payments of your loan/ credit card.

-‘XXX’ indicates that the member bank or credit institution has not reported information in this month to CIBIL on that loan /credit card account.

-STD: STD indicates that it is a ‘Standard Account’ and you are regular in making payments on your loan obligations. It implies that payments are being made within 90 days. Any account overdue by more than 90 days is classified a non-performing asset by lenders

- SUB: Sub-Standard – An account which has remained an NPA for up to 12 months

- DBT: Doubtful – The account has remained a sub-standard account for a period of 12 months

- LSS: Loss – An account where loss has been identified and remains uncollectible

This makes it imperative to review and understand the contents of your CIBIL Score and Report and assess your own credit health before applying for a loan.

(This article has been originally authored by Harshala Chandorkar, Chief Operating Officer, TransUnion CIBIL)