Difference Between CIBIL Score & CIBIL Report

Loan applicants may be perplexed by terms such as credit score, CIBIL score, and credit report. Check read this post to learn more about these phrases and how they differ from one another.

Banks now place a high value on a loan applicant’s credit history. To reduce the danger of default, they prefer lending money to borrowers with a good credit history. Banks utilise an applicant’s ‘credit score’ to determine whether he or she is a responsible borrower. On the internet, you will come across many different phrases such as CIBIL score, credit report, and so on. How do these phrases differ from one another? Let’s take a closer look at these terminologies to see how they differ.

Customers should actively track their cibil score and credit reports in today’s era of extensive internet connectivity and global system integration to be informed about their credit position. This information aids in the maintenance of a good credit record or the improvement of a poor credit score. We may learn how these two concepts differ by examining the meaning and characteristics of credit scores and credit reports.

What is a Credit Score?

In India, your credit score is a three-digit summary of your credit history. A credit agency considers your credit history and applies its own algorithm to create a three-digit score, which typically ranges from 300 to 900. The higher your credit score, the more responsible you have been in the past with credit. Most Indian lenders prefer to lend to borrowers having credit scores of 700 or above.

What is a CIBIL Score?

Credit Information Bureau (India) Limited is the full name of the company. CIBIL is one of India’s four major credit bureaus. Equifax, CRIF Highmark, and Experian are the other three bureaus. The Reserve Bank of India has granted licences to all four credit bureaus (RBI). The CIBIL score is the credit score calculated by CIBIL. The main difference between CIBIL and credit score is that credit score can be obtained from any of India’s four credit bureaus. However, only CIBIL delivers a CIBIL score. Any of the four credit bureaus’ credit scores are equally acceptable. However, most banks prefer a CIBIL score.

What exactly is a CIBIL Report?

A Credit Information Report (CIR), commonly known as a CIBIL report, is a collection or running record of an individual’s credit and loan related information. A credit report includes not only financial information but also personal information such as PAN number, name, residence, gender, and so on. The CIBIL report is an essential document for keeping track of all your credit-related information. CIBIL reports are prepared using client credit data obtained from various banks and lending institutions. This information is then organised and processed to provide a comprehensive credit report for each customer. The information listed below is typical of a CIBIL report.

  • Name, age, address, and other personal information
  • Information on employment and earnings
  • Loan information, including types of loans obtained in the past, ongoing debts, and repayment schedules
  • Loan defaults, if any Loan settlements, if any credit card information for all credit cards owned by your credit card bill payment defaults, if any credit card cancellations, if any
  • The number of inquiries you have made through various loan providers
  • Credit score is an important component of your credit report.

Difference Between a CIBIL Score and a CIBIL Report

Understanding the CIBIL report should be simple now that you know what the CIBIL score is. Your CIBIL report is a report generated by CIBIL that contains information about your CIBIL score, debt accounts, and payments. It comprises information such as previous loans, credit card debts, and so on, as well as how you repaid them. CIBIL generates your CIBIL score using all this information.

Aside from debt information, it also includes personal information such as your name, address, Permanent Account Number (PAN), contact information, and so on. Furthermore, if you apply for a new loan or credit card, the lender notifies CIBIL, and all such applications are also noted in your CIBIL report. The other three credit bureaus, like Bajaj Finserv, provide their own credit reports.

What are the benefits of having a good CIBIL Score?

When you apply for a personal loan, your CIBIL score is one of the first things a lender looks at. This information can be used by banks and other lending institutions to determine a borrower’s creditworthiness and ability to repay a loan. Does this imply that only people with a high CIBIL score are eligible for loans? No, a borrower with a low or non-existent CIBIL score may be able to obtain a loan. Your CIBIL score determines your creditworthiness. The Credit Information Bureau (India) Ltd., better known as CIBIL, has been authorised by the Reserve Bank of India (RBI) to generate this score for a person.

A true CIBIL score ranges from 300 to 900, with 900 indicating the maximum level of creditworthiness. Your credit score influences your chances of being approved for a personal loan. Your CIBIL score is determined by how you handled previous debt repayment. You can keep your credit score high by paying all your bills on time, including credit card bills, loan EMIs, and other overdue commitments. Failure to make a loan payment, on the other hand, decreases your credit score. When you’re short on cash, a personal loan can come in handy. However, before the loan can be approved, you must meet the lender’s severe standards.

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