What is CIBIL and how does it concern you?

What is CIBIL and how does it concern you?

What is CIBIL?

Transunion CIBIL, formerly known as CIBIL, is the first credit rating agency of India. Founded in the year 2008 is registered by The Reserve Bank of India and established as per The Credit Information Companies act, (Regulation) 2005. CIBIL was formed with an objective to introduce transparency and seamlessness in the credit rating process in the country.

Who all are shareholders of Transunion CIBIL?

Some of the shareholders of CIBIL Transunion international, ICICI, HSBC, Bank of India, State Bank of India, Indian overseas Bank, Union Bank of India, Allahabad Bank, and Bank of Baroda.

CIBIL Credit Score Report

CIBIL maintains an extensive database of the credit payment behaviour of all individuals and businesses with a prior credit history. It sources information related to credit card and loans from banks and non banking financial companies (NBFC). CIBIL develops a statistical score to arrive at the dynamic 3- digit or 1- digit CIBIL score, as reflected in CIBIL report. Quikkloan helps customers to improve low or bad CIBIL score.

CIBIL Credit Score Report

Banks and other financial institutions submit your monthly transactions details of loan amount borrowed, delay in repayment, loan default to CIBIL. It tracks all your financial activities and assigns you a score on a scale 300-900, wherein 900 being the highest score, suggesting that you are a trustworthy customer and 300 being the lowest, indicating that the customer is most likely to default. Quikkloan also advises poor cibil score customers to get personal loan online.

Impact of High or Low CIBIL Score

To maintain a high CIBIL score, one has to make payments on or before due date. It is also important to note that although one can have a really high income, but low CIBIL score will lead to a lower limit on borrowing capacities and credit card use.

CIBIL 2.0

Banks are now switching to a newer version of CIBIL score, this index also includes an index for individuals having a credit history of less than 6 months. The score range is from 1 – 5, wherein 1 signifies highest risk and 5 signifies the lowest risk. Hence, this index will further help banks in identifying bad customers who have no credit history as opposed to the earlier system where it was not possible to do so as all the new customers had a perfect score.

Related Post

Leave a Reply