Thursday, 3 December 2015

Illusions of CIBIL Score

So many times we may have heard of people checking their credit scores that CIBIL generates for them. Based on the score and the report, the loan applicants feel either happy or dejected because that is what decides whether or not one’s loan application will be accepted by the institution. While host of people are using CIBIL score almost daily to find their loan eligibility, it is bound to create confusions and misunderstandings around CIBIL and around credit scores. Let's demystify those:

  • CIBIL gives credit reports for free
→ CIBIL charges a premium fee of Rs. 500 for generating a CIBIL report for individuals.

  • One can extract anyone else's credit report without any documents
→ CIBIL requires minimum of two identification documents to be able to generate someone's credit report.

  • CIBIL provides credit reports only to banks, not individuals
→ CIBIL caters to anyone who requests for a credit report, but in a structured application process.

  • CIBIL rating is the only deciding factor for loan approvals
→ CIBIL rating is only ONE of the deciding factors for loan approvals, there are several other criterion that are considered. But yes, CIBIL rating is the most important criteria.

  • There are no chances of improving a bad CIBIL score ever
→ There are several ways to improve a spoil CIBIL score by interacting with Credit Sudhaar's competent counselors.

  • CIBIL gives analyzed credit reports
→ CIBIL will only give a detailed report of your credit activities, it is the counselors or underwriters who study it and analyze it. Not CIBIL.

  • CIBIL keeps track of all your online financial activities
→ The banks or financial institutions where you apply or enquire for loans are the ones that maintain your data for all loan transactions and report to CIBIL. CIBIL doesn't track any finance activities.

  • CIBIL will have someone's records only when they have delinquent accounts
→ CIBIL maintains records of anyone and everyone who has ever applied or enquired for a loan or credit card. Good scorers as well as bad scorers can find their details on CIBIL records.

  • Once I get my credit report, means I can straight away apply for a loan anywhere
→ Once you get your credit report, you must be able to comprehend it, get it analyzed by a counselor or a competent authority – they will be able to guide you better.

  • Banks reject individuals with no CIBIL score history
→ Not all banks accept and not all banks reject 'no history' customers. Some banks and lenders are willing to take up risks on no history customers as well. Credit Sudhaar helps such customers by providing the correct guidance to resolve the matter and create good track of credits.

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