Understanding Credit Information Report- A Real Life Report Card!

A credit score can tell your creditworthiness in numbers but a CRIF Credit Information Report can explain to you the numbers of the above.

Imagine, you’re applying for a new loan and you need a CRIF Credit Score. Higher the score like 700+ is higher the chances, and lower the score is lower the chances of getting a loan. But how is this score determined and why did you get the XYZ Credit Score? The answer is in your CRIF Credit Information Report.

What is a Credit Information Report?

In simple words, it is an explanation of whether you should be sanctioned a loan. A Credit Information Report, also known as CIR, is a detailed report based on your past loans, repayment performance, loan inquiries, and overall credit history to determine a strong case for or against permitting you a new loan.

While a Credit Score is a numerical representation of an individual’s creditworthiness based on their past credit performance, CIR is a detailed study of what this Credit Score means and how it may affect your chances of getting a loan. In other words, a CRIF Credit Score provides probability but CIR backs it up with analysis and explanation of your performance history. Both are essential to understanding your creditworthiness.

How is your Credit Information Report procured?

Normally, banks and other financial institutions submit a month-on-month record of their customers, both individuals, and companies, to Credit Bureaus. Credit Bureaus are companies licensed by the Reserve Bank of India to operate as Credit Information Companies. Since CRIF is an RBI-approved Credit Bureau, this information is highly confidential that assures it is only used for record keeping and retrieved when registered lenders, banks or other financial institutions enquire for a loan application.

What does a Credit Information Report include?

CIR is a detailed report that covers your-

· Personal information such as your full name, gender, date of birth, contact numbers, address, place of employment and various identification numbers like Voter ID, PAN, Passport, etc.

· Account history contains details of your current and past loans and credit accounts, including the type of accounts you own, creditor’s name, current balance, credit limit, etc.

· Inquiries that include your number of applications for a loan or credit card at a financial institution and

· Credit Score: A three-digit statistical number that evaluates your creditworthiness. The credit score ranges from 300-900. Any score above 700 is considered good.

Why is Credit Information Report important?

Just like your Credit Score, CIR helps you to get a new loan. But with CIR, you as an individual or a company can understand why your score is high/low, identify and rectify errors (if any), and predict the possibility of getting a loan early on. In simpler words, it gives you an answer beforehand so that you can take a wiser decision of whether to apply for a loan or not.

How often does a Credit Information Report change?

Since records usually get updated on a monthly basis with new data, it is recommended to keep a tab on your CIR regularly.

How can you maintain a good Credit Information Report?

CIR analyses your credit history and inquiries, so keeping your current repayment transactions on time and simply checking your CRIF CIR and Credit Score regularly is a must. Besides disciplining your credit behavior like paying EMI’s and card dues on time, keeping your credit card balances low, managing your debt(s), limiting applications for new credit, etc. are some other useful ways to ensure you maintain a good Credit Score and Credit Information Report.

To check your current CRIF Credit Information Report,

Click HERE.

Is Credit Score the Only Criteria While Taking Loans

Credit score, a three-digit number provided by any of the four credit information companies in India, plays a crucial while taking loans. But it is not the only criteria which lenders take into consideration. Here are a few things besides a credit score that the lenders consider before they hand you that loan:

Age

Younger people are considered to be abler to repay a loan. The logic being that they have more time and energy to earn money and are more probable to repay the loan. Generally, banks prefer salaried employees between the age group of 21 to 60 years. The age criteria shift by 4 years for self-employed people ranging from 25 to 65 years.

Employment Stability

Your job stability holds a substantial weight with the lenders. Your career gaps not only bother the next company you are eyeing, but also the money lenders. Frequent job switches also indicate unstable behavior. For salaried people, they should be employed for more than 2 years in the current role and for business people, they should be running a business for at least 5 years. This, however, is quite subjective and is dependent on other conjoined factors like the organization you are working at, your annual CTC, the growth factor of your profile and so on.

Credit Score:

Credit score or credit report holds an important stance in getting you a loan at lower interest rates. Maintaining a good credit score increases the chances of getting loan with added multiple negotiating options those are related to tenure, loan amount, EMI (Equated Monthly Instalment) and interest rates. If in case your lender(s) finds you at risk with a default payment history, huge outstanding loan, or fraudulent track record, thereafter lenders have every right to cancel your loan application or might charge higher interest rates to lower their risk.

Past and Present Financial Situation

Finance digs into your past, but thank God it is only limited to monetary matters. Your financial history is very well considered by the lenders to build your personality. Details such as your payment patterns, defaults, and irregularity if any, is considered by the lenders to gauge the risk they are investing in. Obviously then, if you were a serial (payment) offender, your chances of landing yourself a loan are unfortunately bleak. Not otherwise though! Lenders also consider your current financial status and quite ironically, you are more likely to get a loan if your financial status is already good.

Existing EMIs

In case you are already paying your EMIs while you look for another loan then you are inviting more difficulties. But if you really need a loan, then you need to prove that you are earning a decent income and are left with an adequate amount of money even after paying all your EMIs and other expenses. If you are juggling well, then the banks won’t mind handing you the money!