Understand CIBIL Credit Report and Credit Score


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RectifyCredit is the first and leading consumer credit information advocacy firm helping consumers at every stage in his/her credit life cycle. Our team of experienced credit improvement consultants can review your credit, assess your current situation, and provide personalized solutions to meet your needs. RectifyCredit Services can help improve your credit profile by providing you consultative guidance on your credit report and financial planning.

RectifyCredit Value proposition

•Identify Issues / Negatives in your credit report
•Provide consultative guidance to individuals for building and improving their credit profile
•One stop shop for all credit issues

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Understand CIBIL Credit Report and Credit Score

  1. 1. RectifyCredit Services Learning Centre “ Strengthening your creditability“
  2. 2. INDEX <ul><li>What is Credit Bureau? </li></ul><ul><li>Multiple credit bureau scenario in India </li></ul><ul><li>Credit bureaus in India </li></ul><ul><li>What is credit report? </li></ul><ul><li>Can I access my credit report? </li></ul><ul><li>How do I access CIBIL credit report? </li></ul><ul><li>How do I access Experian credit report? </li></ul><ul><li>What is Credit Score? </li></ul><ul><li>Risk assessment in Indian financial institution </li></ul><ul><li>Factors contributing to your credit score </li></ul>
  3. 3. What is Credit Bureau? <ul><li>A credit bureau is a company that collects information from various sources and provides consumer credit information on individual consumers for a variety of uses. </li></ul><ul><li>Credit Bureaus keep comprehensive credit information, which provides details pertaining to credit facilities already availed of by a borrower as well as his payment track record. </li></ul><ul><li>It is an organization providing information on individuals borrowing and bill paying habits. This helps lenders assess credit worthiness, the ability to pay back a loan, and can affect the interest rate and other terms of a loan. </li></ul>
  4. 4. India - Multiple Credit Bureaus Scenario <ul><li>RBI has recently approved 3 new credit information companies – Experian, Equifax and Highmark. </li></ul><ul><li>The RBI approval will also allow CIBIL and others to widen its scope and provide services to other industry verticals such as telecommunications and insurance, apart from banks, in the near future. </li></ul><ul><li>CIBIL has records of more than 200 million borrowers collected from 75b member institutions. </li></ul><ul><li>All new CICs are approaching member banks, cooperative banks for loan records. </li></ul>
  5. 5. Credit Bureaus in India <ul><li>Currently there are two credit bureaus operational in India, They are CIBIL and Experian </li></ul><ul><li>CREDIT INFORMATION BUREAU (INDIA) LIMITED - CIBIL Hoechst House, 6th Floor, 193 Backbay Reclamation, Nariman Point, Mumbai 400 021 </li></ul><ul><li>Website: www.cibil.com </li></ul><ul><li>2. Experian Credit Information Company of India Private Limited Platina, 2nd Floor, C-59, G Block, Bandra Kurla Complex Bandra (E), Mumbai - 400 051, India T: +91 (0) 22 6117 6700 F: +91 (0) 22 6117 6792 www.experian.in </li></ul>
  6. 6. <ul><li>Two major credit reporting bureaus keep track of the credit reports of more than 200 million Indians and they are: CIBIL and Experian. Equifax and Highmark are in the process of setting up credit bureau in India. </li></ul><ul><li>Typically, all have the same information, except that some companies are stronger in certain geographic areas and thus may receive reports on your credit status from even local cooperative banks & NBFC’s (Non Banking Financial Companies) </li></ul><ul><li>Credit Report is summary of information about all your existing - and past - credit accounts. Credit accounts ranging from credit cards to mortgages, student loan repayments, and any other loan that is reported to these credit bureaus. </li></ul><ul><li>Your report also gives your personal information like PAN Number, Passport ID, Voter ID, Date of Birth, Contact details, current and previous addresses. </li></ul>What is credit report?
  7. 7. Can I access my credit report? <ul><li>Section 21 of the CICRA Act, 2005, which provides “any person, who applies for grant or sanction of credit facility, from any credit institution, may request such institution to furnish him a copy of the credit information obtained by such institution from the credit information company”. </li></ul><ul><li>RBI, in Credit Information Companies Regulations,2006, framed under the Act, has already prescribed in Regulation 12(3) a maximum fees of Rs.50/= (Rupees fifty only) for the purpose. </li></ul>
  8. 8. How do I access my CIBIL report? http://www.cibil.com/accesscredit.htm
  9. 9. How do I access my Experian report? http://www.experian.in/consumer/index.html
  10. 10. What is Credit Score? <ul><li>Credit score is a result of complicated statistical analysis of the information that is available in your credit report. All the information used to create your credit score is drawn from your credit report. </li></ul><ul><li>There are several variables that go into creating your standard score like past payment history, balance outstanding, credit account status, age of accounts etc. </li></ul><ul><li>Individual lending or credit-granting institutions use the credit score for decision making based on their credit policy. </li></ul>
  11. 11. What is Credit Score? <ul><li>Credit score is based on your past financial responsibilities and past payments and credit, and it provides potential lenders with a quick snapshot of your current financial state and past repayment habits. </li></ul><ul><li>Your credit score reveals to lenders about how much of credit risk you are for him if he lends money to you. </li></ul><ul><li>Based on the credit score, lenders decide whether to trust you financially - and give you better rates when you apply for a loan. </li></ul><ul><li>Credit score: the Higher the Better! On the scale of 0 to 1000, any score above 500 should be good enough to get due attention of any lender on your credit application. </li></ul>
  12. 12. Segregation by credit score 500 600 700 800 800+
  13. 13. Decoding the Bureau Score <ul><li>Usually the bureau score predicts the likelihood of 91+ days delinquency on one or more credit portfolio in the period of next twelve months. </li></ul><ul><li>The score is build using various attributes based on credit behavior information like: </li></ul><ul><ul><li>Credit Utilization </li></ul></ul><ul><ul><li>Delinquency Measures </li></ul></ul><ul><ul><ul><li>Days past due </li></ul></ul></ul><ul><ul><ul><li>Amount past due </li></ul></ul></ul><ul><ul><li>Enquiries </li></ul></ul><ul><ul><li>Trade Attributes </li></ul></ul><ul><ul><ul><li>Age </li></ul></ul></ul><ul><ul><ul><li>Type </li></ul></ul></ul><ul><ul><ul><li>Mixture </li></ul></ul></ul><ul><ul><li>Individual Age </li></ul></ul>
  14. 14. Indian Financial Institution – Credit Assessment 300 500 600 650 700 750 800 850 900 Score Decline Accept High Risk Low Risk Cut-off 1 Cut-off 2 Refer
  15. 15. Indian Financial Institution – Credit Assessment Sr. No. Score Band Risk Policy 1 300 to 600 High chance that your loan application will get rejected. Lender will consider you application however it will have to pass through their other risk assessment criterions. 2 601 to 750 Lender would be happy to assess you application and take it forward towards acceptance if it pass through their other risk assessment criterions. 3 750 + Lenders will accept you application from credit risk point of view, high chance that you application will be accepted unless there are any other issues associated with your application.
  16. 16. Factors contributing to your credit score
  17. 17. Personal Information Name, Date of Birth, Gender, Telephone Numbers, PAN ID, Voter ID, Passport Number Address Block Address and Date of Birth on which its reported to credit bureau Score & Reason Code Block A reason code is an explanation of a specific credit factor that can be improved. It explains why the individual did not receive the most optimal score for a particular factor. Account Summary Number of accounts, Number of overdue accounts, Number of zero-balance accounts, Sanctioned Amount,, Current Balances and Overdue Balances, Most recent account, oldest account Enquiries Number of enquiries, Number of enquiries in past 30 days, Number of enquiries in past 12 months, Number of enquiries in past 24 months, Date of most recent enquiry
  18. 18. Account Information MEMBER NAME: ACCOUNT NUMBER: TYPE: OWNERSHIP: Dates OPENED: LAST PAYMENT: CLOSED: REPORTED: Amount SANCTIONED: CURRENT BALANCE: OVERDUE: Account Status SUIT FILED / WILLFUL DEFAULT/WRITTEN OFF STATUS Payment History The most recent 18 months of Payment History. Each month displays the Number of Days Past Due (NDPD)/Asset Classification (AC) for that month.
  19. 19. Enquiry Enquiry section contains information on enquiries made on the consumer by other Member(s) with credit bureau. Member Name Date of Enquiry Enquiry Purpose Enquiry Amount
  20. 20. Thank You!!! For more information please visit www.rectifycredit.com