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Your Credit Report - What is it?

Are You Credit Wise?
Your Credit Report - What is it?

Your credit report contains detailed information on your credit history, including identifying information, credit accounts and loans, bankruptcies and late payments, and recent inquiries.

Credit Information Bureau (India) Limited is among the first credit bureaus to have set shop in India. Aimed at fulfilling the need of credit granting institutions for comprehensive credit information by collecting, collating and disseminating credit information pertaining to both commercial and consumer borrowers, to a closed user group of Members. Banks, Financial Institutions, Non Banking Financial Companies, Housing Finance Companies and Credit Card Companies use CIBIL’s services. Data sharing is based on the Principle of Reciprocity, which means that only Members who have submitted all their credit data, may access Credit Information Reports from CIBIL. The relationship between CIBIL and its Members is that of close interdependence.

Data relating to your loan payment performance is collated on your credit file and may be used by Banks and Finance companies as part of the assessment process for any new loans you may apply for, or for a review of your existing loans.

Your CIBIL file is an indication of your financial health. This is very important to the lenders as they assess the risk involved in granting credit.

You should therefore know what’s on your credit file and periodically check to see what new data has been uploaded.

Why your credit report is important

When you ask for a loan or credit, lenders check your credit rating. This is typically a numeric ranking that indicates how creditworthy previous lenders think you are.

Your credit history, summarized by a credit rating, is essentially your financial reputation. It allows banks, employers, and others with whom you are making financial agreements, to review how you've dealt with your financial obligations in the past. The rating is held in a report accessible through a credit bureau, and updated every 30 days by banks, credit card companies, and others with whom you have lending agreements.

You achieve good credit when you prove you can responsibly manage the debt you incur. This means paying your bills on time and staying within your credit limit. Your credit report is the official document that contains this information.

By reviewing your credit report regularly, it allows you to be aware of any information that is uploaded on your credit file. The other advantage of monitoring your credit file is that it protects against possible fraudulent use of your personal details to obtain credit. Your credit report also helps credit providers to make faster and more objective lending decisions.