How To Interpret Cibil Report?

So, you have got your CIBIL score and report. Now, what do you make of it?

An extremely important aspect considered by lenders before approving your loan application is your CIBIL score. Additionally, the CIBIL score provides necessary insights into your credit history through past patterns of credit usage and loan settlement behaviour.

What is a good CIBIL score for Credit Card you ask?

Any score above 750 is a good credit score. Generally, banks and Credit Card companies will process your Loan or Credit Card application without any hassle. But a good CIBIL score does not mean that lenders will just part with funds the moment you apply. They will look at your financial portfolio and sources of income to determine your ability to repay.

How to read CIBIL report?

The CIBIL report has two vital attributes:

  • Account Information

- Personal Specifics

    It contains the details of your credit facilities that would entail , name of the lender(s) , the category of credit facilities such as  Home Loan , Personal Loan etc , account numbers , mode of holding , the date of account opening , date of last payment , loan amount  , current balance etc.

- Account Specifics

This section would comprise of details such as the lender’s name, account number, account type – whether it is a Credit Card, personal loan etc, ownership of the account , date of account opening and closing and the final date when these details were reported to CIBIL. These details should be factually accurate.

- Account Status

This portion would elaborate whether your account is Settled – means a partial payment has been made against the total outstanding or Written off – when payments have not been made for more than 180 days and reports this.

- Your Days Past Due (DPD) for every loan or credit availed

The DPD indicates how many days payment on that account is late by that month.

  • Enquiry Information

    This segment assists with details of all your loan applications. An enquiry denotes that a credit institution has requested for your credit details from CIBIL. If you have multiple enquiries in a short span of time, the Lenders will tread with caution regarding your account and behaviour of seeking excessive credit.

Understanding CIBIL score

The CIBIL score ranges from 300-900 -- with 300 being poor and 900 being the best score for credit-worthiness.

In other words, if your CIBIL score is inching towards 900, banks and financial institutions will roll out the red carpet for you if you land up at their doorstep.

How to read CIBIL report score is explained below :

What is a brilliant score? (700-800)

This puts you in the top bracket of creditworthiness and lenders are usually very positive if you approach them. This means that you use your Credit Cards carefully, have paid your card dues, repaid loans on time, have not run up massive debt and are generally a responsible individual, financially.

In the trade parlance, you are a low default risk. You will also be given the best rates, interest wise.

What is a good score? (600-700)

You may not be in the top category. But will still get the loan.

You may have missed/delayed payments or have a slightly misplaced loan portfolio, you’re still good.The lender may add a few decimal points to your interest rates and may seek slightly more paper-work. But at the end of the day, a lender will give you a loan or credit card if you are otherwise financially secure.

What is an average score (500-600)

Been a bit free spending with your money?. You may need to work on your financial practicality. While your credit score may mean that it will be very difficult to get a loan, you can work on improving your score. Pay Credit Card bills on time, repay loans on time, keep the right credit mix and generally avoid practices that raise red flags with lenders or credit agencies.

What is a bad score (below 500)?

You haven’t been very cautious with your money management? It’s unlikely that banks or financial institutions will accept your loan or Credit Card application because your history is likely to be filled with defaults and delayed payments.You will have to work hard to get your scores up. It will take time, but it is not impossible. Read our article on 7 smart moves to improve your credit rating.

Note: The three other credit rating companies have slightly different numeric values for credit-worthiness.

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* Terms & conditions apply. Personal Loan disbursal and Credit Card applications at sole discretion of HDFC Bank Ltd.The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action.