How to Read and Understand Your CIBIL Report?

Credit information bureaus are institutions tasked with the responsibility of collecting data about individuals’ credit history and their attitudes towards credit. Based on the data collected, these financial institutions assign credit scores to borrowers. The credit score is a numerical representation of one’s creditworthiness as a borrower. CIBIL score ranges between 300 and 900, this tells a lender how likely it is that a borrower will default on loan repayment. A credit report is a document that details a borrower’s credit history as well as other information about them that helps lenders assess a borrower’s repayment capacity. It is, thus, that all lenders check borrowers’ credit scores and read credit reports before deciding on loan applications.  

Borrowers must also learn to read credit information reports if they want to develop an understanding of the factors that affect their credit scores, take corrective measures to improve CIBIL score and in general, enhance their eligibility for a loan. 

What is a CIBIL Report?

A CIBIL report, also known as a Credit Information Report (CIR), is a comprehensive document that details an individual's credit history across various loan types and credit institutions over time. It includes personal information, account details, and a record of credit inquiries. This report is essential for lenders to assess a borrower's creditworthiness and repayment capacity.  

Here are the key components of a CIBIL report: 

• Personal Information: Includes details such as name, date of birth, address, and employment information. 
• Account Details: Provides information on all credit accounts, including loans and credit cards, along with their current status, outstanding amounts, and payment history. 
• Credit Inquiries: Lists all instances where a credit report has been accessed, indicating the number of times a borrower has applied for credit.
• Credit Score: A three-digit numeric summary of your credit history, derived from the details in the CIBIL report.   

Components of a CIBIL Report

Before understanding how to read your CIBIL report, let us know the components of the report. 

CIBIL Score 

In India, credit users often get confused between a credit score and a CIBIL score. Therefore, let us understand the difference between a CIBIL and a credit score. In India, four credit information bureaus are authorised to assess a borrower’s creditworthiness. These are Equifax, Experian, CRIF High Mark and TransUnion CIBIL. Of these four, TransUnion CIBIL is the most well-recognised and is preferred by several lenders in India. The credit rating given by TransUnion is known as the CIBIL score. It is a three-digit numeric representation of your creditworthiness, ranging from 300 to 900.  

Control Number

A control number is a nine-digit number that helps you identify your credit report and credit profile. If you want to perform any communication with TransUnion CIBIL regarding your credit profile, this is the number you will have to quote during your conversations with them. 

Days Past Due 

This refers to the number of days that have passed since your payment due date. Borrowers should try and keep this number at zero. 

Settlement Amount 

In the case of a loan dispute, lenders and borrowers generally agree on an out-of-court mutual settlement. When this happens, the borrower is required to pay a certain amount to the lender to settle the dispute. This amount is known as the settlement amount. Again, ideally, this amount always also be zero. 

Written-Off Amount 

When the lender and borrower agree to close a loan account by paying the settlement amount, the remaining amount left that the borrower should have paid but did not is called the written-off amount. 

Amount Overdue 

Under this section, one will find information about the amount that the borrower should have paid but did not. 

High Credit 

This refers to the maximum amount that has ever been billed by a credit user on their credit card. 

Non-Performing Assets 

Payments that have been overdue for more than three months are classified as non-performing assets. 

How to Read your CIBIL Report 

Let us now look at the various sections that a borrower sees in their credit report and what each section denotes in order to read the report properly. 

CIBIL Score 

A credit score is a three-digit number ranging between 300 and 900 that indicates a borrower’s creditworthiness and repayment capacity. The higher your credit score or the closer it is to 900, the better an individual’s chances of availing of a loan. If a borrower’s CIBIL score is zero, it means their credit history is relatively new, and not much information is available to generate a score. If a borrower’s CIBIL score is -1, it means they have no credit history at all. 

Personal Information 

Under this section, borrowers can find basic information, such as their name, gender, and date of birth as well as identity-related information, such as their PAN, Aadhaar, or Passport details, and Voter ID Card details. 

Contact Information

Under this category, you will find information that will help lenders contact you. Under this category, you will find information, such as home address – both the residential address and office address, email address, and phone number. 

Occupation Information 

This section contains information regarding a borrower’s employment and income history.

Account Information 

Under this section, you can find all the information related to all the active loans and credit cards that one has.  

The account information will give you and your lender information about all the lenders you have worked with in the past, the types of loans you have availed of, details of these loan accounts, your current outstanding debt and month-on-month payment details for the last six months. Here, you can also find information about outstanding balances and days past due. Your credit score is calculated based on the information you see in this section.  

Enquiry Information 

Under this section, one finds information about all the hard enquiries made by lenders in response to the borrower’s credit applications. Too many hard enquiries negatively impact a borrower’s credit rating.  

Final Words 

Your credit score is one of the first things that lenders check about you after receiving your credit application. Therefore, you must make sure your credit score is at least 750 or above. It is important to understand how to read credit reports to take corrective measures to improve their credit score.  

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