NEWS & ADVICE : CREDIT CARDS
CIBIL and its role in credit risk management
By Ankit Sharma
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Credit bureaus rate credibility of customers based on scorecards. These scorecards are designed by the credit information companies to arrive at a credit score for the customer.

CIBIL works on hub and spoke model which facilitates in reducing redundancy and inconsistency.

It believes in maintaining data quality based on standard 3C approach: Complete, Correct and Current. Complete data refers to one which is free of redundancy, is exhaustive and bears details of individual items. Correct data means data which is accurate and current data means one which is regularly updated with recent details.

CIBIL provides information in reference to current outstanding loan amount, credit limits, payment history etc while negative information refers to late payment, default etc.

CIBIL has received the ‘In Principle Approval' for certificate of registration from the Reserve Bank of India in 2009 which allows it to extend its services to individual customers also. Many analytical reports are also published by CIBIL based on trends and developments in business.

CIBIL shares information only with those companies which are its members and who provide data to it.


 


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(Comments Posted : 3) Post Your Comments
1. I have taken a personal loan from Money Line Credit Ltd. I have paid total amount and there is no dues as on date as per their statement and clearance letter. But when I applied for a home loan, there was a over due amount showing in their CIBIL report. Hence my home loan application is kept pending / not processed. This has been informed to CIBIL also, but my requests are not considered at all. Can any body advise on this. Should I go to consumer forum on this. If so what will be the impact ?

Regards,
Ranga
MV Ranga Rao (Posted: Aug 5, 2011)
2. Very informative artice, Indeed CIBIL Credit Report and Credit Score plays an important role in credit decision. The score will also mature and become close to accurate over a period of time. I am sure the day isn't long when financial institutions will make a credit decision only on the basis of credit score!!

Regards
Aparna
info@rectifycredit.com
Aparna (Posted: Nov 20, 2010)
3. Very informative artice, Indeed CIBIL Credit Report and Credit Score plays an important role in credit decision. The score will also mature and become close to accurate over a period of time. I am sure the day isn't long when financial institutions will make a credit decision only on the basis of credit score!!

Regards
Aparna
info@rectifycredit.com
Aparna (Posted: Nov 20, 2010)
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