21 Nov CIBIL Score and CIBIL Report: Know its Difference and More
Are you looking to seek credits from the bank but unaware of the terminologies such as credit score, credit report, and CIBIL score used by the bank representatives? Worry not. Today we will cover the details of these terms and differences among them in-depth.
As said above, these terms are commonly used by financial institutions such as banks while lending money to a borrower. They check the credit history of a loan applicant to determine if he/she is a responsible borrower and thereby minimize the risk of default.
In today’s rapidly growing interconnected world, one has to know and track the credit scores, CIBIL scores, and credit reports to stay informed about their credit standing. This information is essential in leading good financial health. Hence, we help you in analysing its meaning, features, as well as their difference from each other.
Credit Score vs. CIBIL Score
What is a Credit Score?
A credit score is a 3-digit summary defining your overall credit history. A credit bureau in India produces this 3-digit score with the help of its algorithm by considering your credit history. The credit score generally ranges between 300 and 900.
If you have been more responsible with your credit in the past, you will have a high credit score. Most lenders in India easily sanction the loans to borrowers having a credit score of 700 or more.
What is CIBIL Score?
CIBIL (Credit Information Bureau India Limited) is one of the major credit bureaus in India and licensed by the RBI (Reserve Bank of India). A credit score is called a CIBIL score when it is calculated by CIBIL.
The credit score by other major credit bureaus of India, such as Equifax, Experian, and Highmark, are also considered equally valid. But, most lenders prefer a CIBIL score.
Note the Difference:
The only difference between credit score and CIBIL is that credit score can be provided by any of the chief credit bureaus in India, whereas only CIBIL provides CIBIL score.
CIBIL Score vs. CIBIL Report
Now that you know the difference between the CIBIL score and Credit score. Let us learn about the CIBIL report in this section.
What is CIBIL Report?
CIBIL report, which is also referred to as a Credit Information Report (CIR) is the report generated by CIBIL based on the details of your credit and loan related information. This data is later processed to make a detailed credit report for each individual.
CIBIL report contains the following information:
- Personal information – name, age, address, Permanent Account Number (PAN), contact details, etc.
- Employment details along with income information.
- Credit score
- Credit card details of all your cards
- Credit card bill payment defaults
- Credit card cancellation details
- Loan data such as ongoing loans, subsequent repayment timelines, and also the loan types availed in the past.
- Defaults on loans & loan settlements (if any)
- Number of inquiries made by you via loan providers
If you did not know, every time you apply for a new Credit Card or any loan, the banks inform CIBIL about it, and all related applications are vigilantly recorded in your CIBIL report.
Note the Difference:
A CIBIL report is different from a CIBIL score, and you cannot interchange the terms. In fact, a CIBIL score is a numerical expression derived by processing credit information, and these numbers indicate the creditworthiness of a person.
On the other hand, a CIBIL report is a document containing the overall credit information of an individual. That is, these reports have detailed information about their credit history.
Importance of Credit Score in India
Every loan or credit card borrower in India should check their CIBIL score from the official CIBIL website regularly, especially if they have taken loans or used Credit Cards earlier. Apply for the loan only if you meet the requirements of the credit score requirements of the lender.
In case you have a poor CIBIL score, we advise you to improve the current score first and then apply for a new loan to get it approved immediately.