CIBIL Score Report has become a common word and heard from every mouth of the lender and borrower. We shall cover few important facts that you as a borrower must know about CIBIL Score. There has been many myths prevailing about CIBIL SCORE in the society. These are nothing but stories heard from person to person and has not much more connection with CIBIL SCORE.

CIBIL Score Report

1.Concept of CIBIL Score range and its usage:

CIBIL Score is a 3 digit numeric digit and Cibil Score range consists of from 300 to 900. CIBIL Score Full form stands for Credit Information Bureau India Limited. The Cibil 300 digit is considered the worst number and 900 is the best number in CIBIL Score. The closer your score is to 900, The higher are the chances of getting loan application approved.

CIBIL Score Data is derived by the details found in the Account and Enquiries sections of the CIBIL Report. In other words, it is based on the consumer’s behavior towards credit i.e. loans and advances in the past or recent loan or credit card inquiries.

CIBIL Score is useful for borrower as well as lending organization to identify the potential of the consumer or Individual based on the past credit data. Past Data reflects the details

• About the consumer’s number of loan accounts closed as well as active,
• EMI paid history,
• Delay or default of EMIs, Potential NPA

2.Factors impacting your CIBIL Score negatively

There are many factors behind the CIBIL SCORE data but we’ll discuss the factors which could affect CIBIL Score adversely.

?Late Payment of EMI and Credit Card Payment:

If your are among those who is not paying Loan EMI or Credit Card dues on time consistently. Make sure your CIBIL Score is likely to get negatively affected. Make sure your bank account has sufficient balance before due date of installment payment.

Make habit of paying all your Credit Card dues before just 1 day of due date to avoid late payment as well as negativizes of CIBIL Score in case of not paying on the due date for whatsoever reason.

?Avoid multiple loan and credit card inquiries.

If you have tendency to take multiple loan or credit card, then your CIBIL Score is going to lower down again. If you are among those who walks with multiple Bank Credit Card inquiries or personal loan inquiries frequently. Or you need XYZ bank credit card in order to pay dues of ABC Bank Credit card, again your CIBIL Score is getting downgrade.

Avoid habit of keeping more than 2 or 3 Credit Card. Close all inactive or dormant Credit Card accounts. Don’t apply credit card to repay the loan or Credit Card dues even if available free of cost. Don’t just apply for any credit facility inquiry for the sake of inquiry.

? Enhancement of existing credit limit.

Enhancement of existing credit limit will also definitely impact your CIBIL Score since this increase of the current balance will burden your repayment capacity.

For e.g., If any salaried person gets his credit card limit increased based on the credit card usage history, this will definitely put burden on his pocket. Or if a Housing loan client demands top up facility on existing loan,.

Friends, I don’t deny to go for enhancement or top up loan unless required but these are just factors which impact your CIBIL Score report negatively. Again, If your repayment capacity is getting increased, enhancement of limit might not affect adversely.

3.CIBIL Score Report: Both Lender and Borrower Prospective view

CIBIL SCORE Report makes very reasonable sense in the process of lending being the valuable tool to identify the potential consumer whose repayment capacity is strong.

Keeping CIBIL Score Report closer to 900 digit by the borrower is likely to get the loan application approved without further investigation.

Many Banks and NBFCs have been using CIBIL Score report as a tool to lend the money to the borrowers whose CIBIL score is typically 750 or more which considered healthy credit position.

4. CIBIL SCORE Value and Credit Worthiness:

We will assume your familiar with CIBIL SCORE report so far. We’ll now try to figure out the score and its credit worthiness so that we can identify to which extend we can expect our CIBIL Report Score is healthy.

CIBIL SCORE	CREDIT WORTHINESS ( % NEW LOANS APPROVED)
300	0
<650	4.7%
650-699	5.2%
700-749	9.7%
750-799	22.8%
>=800	57.6%
900	100%

Conclusion:

CIBIL Report Score indicates the credit worthiness of the consumer therefore it is advisable to maintain the CIBIL Score Report healthier by adhering the above points. As a borrower it we loss even some % of CIBIL Score Report, we may face difficulty while applying any credit facility with lender. And in few cases if lender sanctions the loan on low CIBIL SCORE report , it may happen that borrower will have to follow lender terms and conditions additionally.