CIBIL AND CREDIT HISTORY

I have seen a good number of people struggling to get Credit funding from Banks or financial institutions due to bad or spoiled credit history or due to bad Cibil score or record. Mostly 90% people said above are not the real defaulters and are good borrowers with paying intentions, but they spoil their credit history or cibil scores due to ignorance or small errors.

Why CIBIL and What is CIBIL :-

A good repayment track record and excellent CIBIL score is the most important criteria adopted by Banks or financial institutions for allowing funding to any borrower. Your credit score which Banks checks through cibil is the important indicator to check ;

Ø    Repayment track record for your existing or past loan accounts you held.

Ø  

         Any late payment or default history for your loan accounts or credit cards.

Ø  

         Number of loan accounts and credit cards etc. held by you.

CIBIL :-

Credit Information Bureau India Limited established in year 2000 is the India’s first Credit information agency. CIBIL collects and maintains data and record of individuals regarding availed loans and credit cards etc. from Banks and financial institutions so as the information is readily available to Banks regarding credit history and records of applicants before they sanction any fresh loans and advances.  All information regarding loans and advances being provided by Banks and financial institutions to CIBIL on monthly basis and in turn the same is shared by CIBIL to Banks and FIs.

How CIBIL report is extracted :-

CIBIL report  is extracted with PAN number , Date of Birth, Address etc. by the member Bank or FI by logging in to www.cibil.com

Credit Score :-

750 or above credit score is generally considered as good score for allowing credit facility by Banks or FIs. 79% of the loans and credit cards are sanctioned to individuals basis CIBIL score of 750.

How to improve your credit score and maintain good credit track record :-

Always Pay your dues before due date :-

Ensure to pay your dues well before or on due date. Normally in most cases people spoil their credit track by not paying the dues on due date. Example : My friend Manjeet availed Home loan from ABC Bank and in turn submitted post dated cheques for EMI from his salary account with XYZ Bank. Now on every due date he did not maintained balance in XYZ Bank and his PDC got bounced every month ,  BUT he is not a defaulter and visits ABC Bank same day and deposits his EMI in cash. Now analyze the situation ; all the EMI was paid by Manjeet on same day in cash but from CIBIL record point of view his all EMI cheques got bounced and he is not a good borrower. ??

Another example of delayed payment is Mr.Gurpreet who has availed a personal loan of 2 lacs from a Financial Institution and in turn had submitted PDCs from his salary account with JKL Bank with PDC date as 10^th of every month. Now as he is getting salary from his employer every 30^th so he allowed each PDC dated 10^th to bounce and deposited EMI every 30^th in cash. Although he had paid all his EMI with no default still he has a bad credit score with 100% DPD.

Always Serve monthly interest in time :-

My friend Sunil Kumar (commission agent by profession) is availing cash credit limit of 2.5 mn from a nationalized Bank since last 5 years. Limit utilization is always under 2.5 mn. During off season i.e. June he did not served the interest amount for a period of 75 days and his Banker also didn’t pressed upon the interest service. Sunil was in the impression that the limit is very well under sanction limit so didn’t bothered about payment and hence not resulting in DPD and now the Banker with which he is taking up the matter for his limit takeover with enhancement has refused due to interest payment default. ??

Credit Card Dispute :-

My friend Bhupinder Singh yesterday told me that he has decided not to pay his credit card dues of Rs.350/- only due to reason his banker has not send his credit card statement in physical form to him.  Now what do you think about his this decision. He will just simply spoil his credit score for future. ??

 Please be sensitized towards these small errors we normally occur and move towards a healthy credit score.

All the best.

Sanjay Mittal

R/o # 1119, Model Town, Phase III, Bathinda.

Mobile 81466 24667

Email : - shsanjaymittal@rediffmail.com