Many people at some point of their life have faced the problem of being denied a loan or a credit card on grounds of not being eligible for the same due to bad credit history. Often people are unable to understand why their name is in the list of defaulters and they find ways to remove their names from the same. CIBIL report or credit ratings play a vital role in such cases.
Credit Information Report (CIR) or CIBIL report, as it is commonly known has become a vital tool used by credit grantors for deciding on the credit worthiness of a person. CIRs enable the credit grantor to gain complete credit history of the borrowers. This helps them to assess the applicant's loan repayment capability and decide whether to grant credit to applicant or not.
The approval of the credit application largely depend on applicant's CIR, along with other factors like their income, it is important for the applicant to know some crucial facts on the CIR:
1.Credit Information Report (CIR) is a month on month record of applicant's loans (home loans, personal loans, automobile loans and so on), credit card or overdraft payments.
2.CIR is accessed by lenders when the applicant applies for a loan. It helps the credit guarantor to ascertain applicant's ability to pay additional debt based on their past performance.
3.Applicant's CIR is their "Reputational Collateral". Individuals who appropriately manage their obligations build this ‘reputational collateral' which may enable them to negotiate better terms with a lender.
4.Prior to commencing loan hunt, it is always advisable to all the applicant's to purchase and review their CIR. It helps them understand what the lender will review while evaluating their loan application.
5.Loan applicant can also access their CIR for a nominal fee by filling up the application form available on the CIBIL website.
6.Understanding the CIR helps the loan applicant to identify the right time in their respective financial life cycle to apply for a loan and increase their chances of loan approval.
7.Most important attributes on Credit Information Report are centric around the applicant's credit payment behavior which includes their payment history, the current balances on various loans they have taken, the number of new credit facilities they have availed and the number of new enquiries made on them regarding their credit repayment.
8.CIR is constantly changing as lenders submit data to CIBIL constantly and this data gets updated in the applicant's credit report. So it is quite possible for the applicator's report to change from one day to the next.
9.CIBIL cannot make any changes to applicators' CIR on its own. It can do so only when the lender authorizes the change and submits the updated data to CIBIL.
10.Financial discipline coupled with prudent credit management will ensure all the prospective loan applicators to have a healthy CIR and this will enable them to access credit faster and on better terms.