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Difference Between CIBIL Score and CIBIL Report

Confused about the difference between your credit report and credit score? The following sections will help you to get a better understanding of these two. To the untrained eye, these two items look more or less one and the same. However, if observed closely, one can see the differences in how they impact and represent a person’s financial health.

What is CIBIL?

CIBIL, founded in 2000, stands for Credit Information Bureau (India) Limited and is the country’s primary credit information company. The prime function of CIBIL is to maintain detailed records of the credit activities of not only individuals but also companies and institutions. These records by CIBIL are collected through the periodic information it receives through member banks and financial institutions.

The terms CIBIL score and CIBIL report discussed here are with respect to the credit activities of individuals and are handled by the Consumer Bureau of CIBIL.

What is CIBIL Report?

As the name indicates, a credit report is a report which has all the details such as the history of one’s debt accounts and their payments. It generally comprises credit card payments, and various loans such as automotive loans, home loans, and student loans. Additionally, they contain the status of those loans such as doubtful, settled, etc.

In simple words, a credit report is a report card of one’s debt history. It also includes a range of personal information such as name and address, PAN card details, known business address and phone number among others.  Your credit report will also include your loan/credit card details, date of loan taken, current balances, and information about whether a person paid his/her bills on time, as well as if the accounts are in arrears.

A credit report will also list all the inquiries that have been for new credit. Basically, a credit report records how well a person has kept up with his/her payment agreements with various current and previous creditors as well as their current balances.

What is CIBIL Score?

On the other hand, a credit score is a statistically generated three digit number between 300 and 900, which would be generated based on the person’s credit history as contained in their credit report. It would be generated from a person’s payment history, accounts owed, length of credit history, types of credit, and also new credit details.

A CIBIL score is different from a CIBIL report in the fact that while a CIBIL score is a numerical expression derived as a result of processing credit information, a CIBIL report is a comprehensive document containing the overall credit information. This means that credit scores are just numbers that indicate the creditworthiness of customers whereas credit reports are documents that have detailed information about their credit history.

Difference Between CIBIL Score and CIBIL Report

Therefore, based on the above descriptions of the CIBIL score and CIBIL report, we can conclude that CIBIL scores are included in and are an essential component of CIBIL reports. Without a CIBIL report, there would be no CIBIL score. While a CIBIL score is a numerical representation of your overall credit history, the CIBIL report is a comprehensive and detailed account of the same.

However, with respect to new lenders, both your CIBIL score and CIBIL report would have a significant impact on whether or not your loan application gets accepted. Most lenders use specific CIBIL scores as an entry threshold for loan application consideration. Good CIBIL scores not only guarantee qualifying you for your desired loan but also come with other attractive features offered by most lenders. These benefits include lower interest rates, higher loan amounts, simpler documentation process and quicker approval times.

Once your CIBIL score qualifies for your desired loan, your CIBIL reports may also be reviewed to formulate a comprehensive idea of your spending behavior and credit trustworthiness. To ensure that your next credit application goes smoothly, it is recommended that you check your CIBIL report as well as your CIBIL score every 3 to 6 months.

In order to find out how your financial decisions can be improved to enhance your credit history, make sure to check out your CIBIL report online. Apart from your CIBIL score, you can also download a financial report online that offers you a complete, personalized overview of your financial health and stability.

How Are They Connected?

A higher credit score on your report represents a lower credit risk for new loans provided to the individual and vice versa. Therefore higher your credit score, the greater is your credit worthiness as determined by the lender and the lower the perceived risk of lending you more money. So while your credit report contains your entire credit history, your credit score is a summation of the same and acts as a snapshot of your credit history with respect to all past and current debt instruments.

When you apply for a loan or credit card, it is extremely likely that the prospective lender will pull your credit score. That will help them determine the prospective borrower’s credit risk. The closer your score is to 900, the more the chances of your loan or credit card application being approved by the bank. Many companies have pre-set standards on loan issue matters. If the credit score is within a certain range, the lender may offer loan at a preferred (lower) interest rate or provide you with a credit card with a higher credit limit, though all other terms & conditions will most likely be the same.

Who Provides CIBIL Score and CIBIL Reports in India

In India, credit reports are provided by various institutions, but the most commonly used is the one provided by CIBIL TransUnion. Other leading credit reporting organizations that currently operate in India include High Mark Credit Information Services, Experian Credit Information Co. of India and Equifax Credit Information Services. Apart from these agencies that operate in India currently, more companies may be allowed into the Indian market in the recent future. For simplicity and because it is the most commonly used one, we mainly consider the CIBIL TransUnion credit report and the corresponding credit score as the one being discussed.

How to Access Credit Report and Credit Score?

One can access their credit report and credit score through any of the three credit reporting agencies that operate in India. Such a request can be made by visiting the website of the respective credit reporting agency and following the instructions such as filling up the online request form and sending it along with a draft or cheque to cover the processing fees. It is advisable that you check your credit score and credit report at least once a year and especially before applying for a new loan or credit card. Keep checking the credit report regularly for any possible errors, make payments on time and avoid  using more than 30% of your total credit card limit, to ensure that your credit score doesn’t go way down compared to the average score.

CIBIL, Credit Score

How to Read a Cibil Report?

Maintaining a good credit history, and ensuring that the same is reflected in your CIBIL report is a must to be able to access loans or credit cards. You can get your CIBIL report by applying for the same at the CIBIL portal. A credit report is issued by 4 authorized credit bureaus in India which are CIBIL, Equifax, CRIF High Mark and Experian. Once you get your credit information report, you must know how to read the report, how information is segregated, and how to verify the accuracy of the information in the report. A CIBIL Report contains -cibil score, personal information, contact information, account information, employment information, credit inquiries, red box and some important terms. Make sure you thoroughly read all these sections to have a better understanding of your cibil report. 

How to Check your free Cibil Score to download credit Report?

What is CIBIL Report?

A credit report is a comprehensive document that details an individual’s borrowing history and repayment record. It provides potential lenders with a detailed picture of an individual’s credit-worthiness based on past and current credit behaviour. It allows lenders to have quick access to accurate information when they receive new applications for credit, and allows them to make faster and transparent lending decisions.

CIBIL Score

A CIBIL score is the first section in the CIBIL credit information report (CIR). Lenders refer to this score to evaluate your loan application. A CIBIL score ranges from 300 to 900 and is calculated on the basis of information present in ‘Account Information’ and ‘Enquiry Information’ sections. A score that is closer to the upper limit is considered to be a favourable one for availing a new credit line. That means the lender will be more confident to lend you money as you have kept the lenders’ trust in the past and repaid on time. Sometimes, your score may be displayed as ‘NA’ or ‘NH’. One of the following holds true in this case:

  • You do not have a credit history.
  • You do not have a credit history to be scored.
  • You do not have any credit activities in the last few years.
  • You have all add-on credit cards and no credit exposure.

Personal Information

The second section contains your personal information including your

  • Name 
  • Date of birth
  • Gender as registered on the CIBIL repository. 

It also contains identity information such as: 

  • PAN 
  • Passport Number
  • Aadhaar Number
  • Driver’s License Number
  • Voter ID Number, and others as reported by lenders.

Contact Information

The contact information section contains your address, telephone number, and email address as specified by lenders. The address category includes information such as office address, residential address, permanent address, and temporary address. Also, it is not just the recent address, the credit report will contain up to four addresses, telephone numbers, and email addresses as provided by lenders.

Employment Information

The employment information section covers the details of your occupation and income pertaining to the time of opening a credit facility, as reported by the lender.

Account Information

Account information is the most important part of the report; the score depends mostly on this information. The section contains details of all your loans and credit cards. The section comprises a table with columns such as the name of the lender, type of credit facility, account number, type of ownership, the date of opening the account, the date of last payment, loan amount, outstanding balance, and a month-on-month record of 36 months of payment. In addition, the Days Past Due (DPD), i.e. the number of days the payment on an account is due, will be mentioned. The most favourable value for this column can be ‘000’ or ‘STD’; all other values are considered a negative indicator. ‘XXX’ implies that there is no payment information received for the corresponding months by CIBIL. Similarly, ‘060’ implies the payment is due by 60 days late. The possible values can be:

  • Standard (STD): For payments made within 90 days.
  • Sub-Standard (SUB): For payments made after 90 days.
  • Special Mention Account (SMA): A special account to report a Standard Account moving towards Sub-Standard.
  • Doubtful (DBT): The account has remained SUB for 12 months.
  • LOSS (LSS): It determines an account where loss is identified but not recovered.

RedBox

Sometimes, you can find a red box as shown in the image placed above the ‘Account Details’ table. If there are disputes associated with the account information, the red box will appear with the text stating the fields that are under dispute. The box will be removed once the dispute is closed. There may or may not be any change in the information based on the lender’s input on the dispute.

Credit Enquiries

The enquiry section includes information about the recent enquiries made by lenders corresponding to the credit applications made. Every time you apply for a credit facility, the lender enquires about your credit history and this enquiry is recorded. The section includes data such as the name of the lender, date of the application, type of the loan, and the loan amount.

Important Terms Mentioned in Cibil Report

  • Cash Limit: This is the amount of cash you are allowed to withdraw from your credit card if you have one.
  • CN (Control Number): This is your report number. You must know of this number if you ever want to file a dispute.
  • DPD (Days Past Due): This indicates the number of days that you have gone past the payment deadline before making it. Here, anything apart from ‘000’ or ‘STD’ is viewed as negative. If you see ‘XXX’ mentioned here, it simply means your lender hasn’t provided this information to CIBIL.
  • High Credit: This shows you the highest billed amount inclusive of fees and interest on your credit card or overdraft.
  • Ownership: This denotes whether you have applied for credit by yourself or have done so in conjunction with another applicant, an authorised user (in terms of an add-on credit card user) or a guarantor.
  • Settlement Amount: If you are disputing a loan amount based on what the lender says you owe and what you think you must pay, the lender decides a settlement amount that you both agree upon. This amount is reflected here and the remaining is written off.
CIBIL, Credit Score

Mistakes That Can Negatively Impact Your Cibil Score

A CIBIL score is a measure of your creditworthiness which is represented in a numerical format. It ranges from 300-900 and you should always try to bring your CIBIL score closer to 900. A higher CIBIL score will put you in a better position to receive a good deal on interest for a loan or while getting a credit card. The majority of the lenders like banks and non-banking finance companies (NBFCs) prefer to sanction a loan or give a credit card to people who have a CIBIL score of 750 and above. But due to some mistakes or lack of awareness, our credit score gets negatively impacted. Building a credit score is a time-consuming process and a lot of effort is involved in it. Therefore, it is always better to avoid mistakes and be more aware and cautious while availing a loan or credit card.

As these factors affect your CIBIL score, you need to be careful and avoid a couple of mistakes. Let’s take a look at some of the mistakes that can negatively affect your CIBIL score. Your CIBIL score is made up several components and each of these components have a different weightage

Top 10 Calculative Ways to Improve Your CIBIL / Credit Score

Let’s take a look at all of them in detail.

Components of CIBIL ScoreWeightage
Payment history35%
Credit Exposure30%
Length of credit history15%
Type of Credit10%
Credit Enquiries10%

Not Paying Bills on Time:
The payment history is the most important factor that has a major effect on your CIBIL score. The repayment history accounts for 35% of your CIBIL score. Therefore, it is extremely important to pay all your bills or EMIs on time. Delay in paying bills or late payment of bills can bring your CIBIL score down. In order to make sure that your CIBIL score does not take a hit, set up reminders on your phone. Another option is to set up an auto-debit facility on a scheduled date to pay your credit card bills. This way, you will not miss any credit card bill payments thereby maintaining your CIBIL score.

Maintaining a High Credit Utilisation Ratio:

A credit utilisation ratio is the percentage of the credit limit which is used by you at a given point of time. You should always maintain a low credit utilisation ratio if you want to improve your CIBIL score. This essentially means you should not max out your credit card limit and limit your usage. Several financial experts suggest that consumers should use only 30% of their total credit card limit. Your credit exposure accounts for 30% of your CIBIL score. If you have a high credit utilisation ratio, it will automatically bring your credit score down. Using the entire credit card limit indicates that you are not able to pay your bills on time and are unable to handle credit.

Availing Several Unsecured Loans:
It is important to maintain a balance of the type of the loans that you avail. Hence, it is advised to have both secured as well as unsecured loans, as it will positively affect your CIBIL score. Multiple unsecured loans lower your CIBIL score while credit options like home loans will help you boost your CIBIL score. The type of credit accounts for 10% of your CIBIL score.

Making Multiple Credit Enquiries:
If you have just started using credit cards, it is better to stick with one at a time. Owning multiple credit cards can become overwhelming as you may lose track of expenses. Also, it becomes difficult to remember the payment due date of multiple credit cards. Therefore, it is ideal to not make multiple credit inquiries at the same time as several multiple inquiries can take a hit on your CIBIL score. It also makes your look as credit hungry. Credit inquiries account for 10% of your total CIBIL score.

Having No or Low Credit History:
A credit history helps lenders understand how you have handled your credit over the years. Therefore, it is better to have a credit history. The length of the credit history accounts for 15% of your CIBIL score.

Checking Your CIBIL Report Too Often:
It is important not to check your CIBIL report regularly as it puts a dent on your cibil score. However, checking the same helps in knowing the errors in your CIBIL report thus it is advisable to check it. But try to maintain a good gap of 6 months just to be your report in a good state. A regular checking of the report can pull your score down.   

Closing Old Credit Cards:
Your old credit cards could have a long credit history which you will lose if you close them. It is important to have a long credit history as it adds weightage to your credit card or loan application. Therefore, as long as it is possible, avoid closing old credit cards or credit accounts.

Spending Beyond Your Credit Card Limit:

If you spend more than 50% of your credit card limit, it signifies that you are hungry for credit and do not have a strong spending discipline. This can affect your credit score as well. For instance, if your credit limit is Rs. 1 lakh and you consistently spend more than Rs.50,000 a month on expenses, it will have a negative effect on your credit score. Make sure that you do not exceed 50% of your credit limit to protect your credit score from a negative impact.

All these are common mistakes that people might make because of lack of knowledge of what goes into a credit score. Avoiding these mistakes will help you improve your credit score.

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