Your credit score can have a significant impact on your financial life...
This score is an indicator of your financial health and it will be verified every single time you apply for a loan or a credit card.
As you may expect, a high score will make your application move much faster while a low score will result in denial of same.
It's for this reason that it's recommended to keep a close tab on what goes into your credit history and check your CIBIL score from time to time, but definitely before you apply for a loan or a credit card.
Fortunately, checking your own score is very easy and you can do so from the comfort of your home. And you can do it for FREE once a year.
What is CIBIL Score & what is CIR?
CIBIL stands for Credit Information Bureau India Limited and is one of the central repositories for credit history of all borrowers in India.
CIBIL collects this information from its member banks and lending institutions on a monthly basis and then uses it to prepare a factual credit history report for each borrower.
This report is called Credit Information Report (CIR).
CIBIL Transunion Score, on the other hand, is a succinct 3 digit numeric summary of your credit worthiness. This score is derived basis information in your credit information report and can range beween 300 and 900.
The closer it is to 900, better your financial health is and better are the chances for your loan application to get approved.
Why is CIBIL so Important?
Your CIBIL score is an indication of how likely are you to pay back the loan basis how you repayment behavior has been in the past.
Most banks will request a check before they approve your loan or credit card application. And more often than not, your this score proves to be the most significant deciding factor.
If you have a good score (750+), your application will fly through. But if you have anything less than 750, you will find it hard to get your application approved.
Given how important it is, you should check your cibil report at least once a year. And, fortunately, once a year, you can get it for FREE...
How to get your CIBIL Report for FREE
In September 2016, RBI mandated all the credit information bureaus to provide at least one annual report for freeto all the borrowers.
Every single bureau, be it CIBIL, Equifax or Experian, has to provide this report for FREE to all the individual borrowers and most do that right on their website.
To get your own free report, you will have to follow following steps:
Step 1 - Start your application
Earlier, it was fairly difficult to find the free application link on CIBIL's website. Even now it's a bit obscure but at least, it is now directly accessible from their homepage.
Go to their website, scroll down and you will see this section. It's kinda hidden but out there none-the-less.
Click on that link to open your application. Alternatively you can open it directly by clicking here.
Once you click this button, you will be taken to the main application screen, that will look something like this:
Step 2 - Fill in your details
The first thing you will have to do on this application page is to provide details about yourself. You will have to fill your name, id proofs (choose PAN number as it's easiest), date of birth, address and contact details.
Your details ideally should be same as what you use for your financial accounts. Also, ensure that your contact details (email and phone number) are accurate as that's where your credentials to myCIBIL will be sent.
Once you have filled everything, go to 'verify your identity' stage.
Step 3 - Authenticate yourself
If you don't already have an account with CIBIL, you should now be asked to authenticate yourself and will be taken to an screen to do so.
You will be given 5 questions basis information drawn from your credit history. These questions will mostly be around your past loans and credit-card accounts.
You will have to get at least 3 out of 5 right to pass this authentication.
If you pass it, you will see a success message on the screen that you can now access your CIBIL score by logging into your account at myCIBIL. This step is done.
Your login credentials will be sent to your registered email id.
In case you fail your authentication, you will have to upload your KYC documents and undergo an offline verification.
Step 4 - Login into myCIBIL
One last step before you can access your free report is to login into your myCIBIL account. You can access the login page here.
Once you login, you will be able to see your CIBIL score, right at the top.
To see your credit history, click on View Report in the navigation bar and then click on Account Information to check your records. Once you click on View Report, you will also see an Enquiry tab. You can click it to see all those banks and lending institutions who have checked your report in past.
So this is it. This is how you access your free report once every year.
However, in case you want your report more than once a year, you can pay for it. Let's look at that option as well.
How to get a Paid CIBIL report
Step 1 - Start your application
Visit CIBIL website and click here.
Once the page opens up, you can choose whether you want a one-time report or you want to check it more than once in any given year. You will get some discount in case you opt for multi-checks.
Make a choice and enter all your details i.e. Name, Date of birth, ID Proof or PAN number, contact details and address in the application.
Step 2 - Make Payment
Once you fill all your information, you will be taken to a payment page.
You can choose to pay from your card or through net banking.
What you pay will depend upon whether you chose to go for a single one time report or for multiple reports over the year.
The cost for one time report is INR 550 as of now.
Step 3 - Get authenticated
You will now be asked to authenticate yourself.
The steps are exactly same and you need to answer 5 questions on the screen. Out of these 5, you need to get at least 3 correct answers.
Once you authenticate yourself, you will be able to download your report immediately. You may have to disable your pop-up blocker in case you are unable to view it.
This same report will also be sent to your registered email within 24 hours.
Step 4 - Authenticate yourself by uploading your ID proof in case online authentication fails
If you don't answer at least 3 out 5 questions correctly, you will not pass online authentication in the previous step.
In this case, to authenticate yourself, you will have to upload your ID proof (PAN, Passport, Voter ID card or Driving License) alongside your payment confirmation form.
This information will be verified by CIBIL.
And once you pass this offline verification, your CIR will be mailed within 7 business days to the address you mentioned in your application.
You can also get your CIBIL report by sending an application through post or courier. You can download this application from CIBIL's website.
You will need to send this application alongside self attested ID and address proofs as well as a demand draft for the requisite payment.
Once your identity is verified, you should get your report by mail in about 7 business days.
Can you just purchase CIR for a lower price?
Yes, yes you can.
Instead of getting your complete report, you can pay just to get your latest CIR.
This is useful if you are only interested in knowing the reporting that has happened against your name in the recent past.
Compared to INR 550 which is the cost for your entire report, only CIR is priced much lower at INR 154. To get only the CIR, download, print and fill this form here.
Choose only CIR option, attach a DD of INR 164 drawn in favor of TransUnion CIBIL and send it alongside your ID/address proofs to following address:
TransUnion CIBIL Limited
One Indiabulls Centre, Tower 2A,
19th Floor, Senapati Bapat Marg,
Mumbai - 400013
How to understand and act upon your CIBIL Report?
There are four aspects to fully understanding and acting upon your CIBIL report:
- What's a good score?
- What all factors impact your CIBIL score and how can you improve it?
- What is signficance of Enquiries in my report?
- What to do if information in CIBIL report is wrong?
Let's see each of these one by one...
What's a good credit score?
CIBIL score can range between 300-900. But, generally anything above 750 is considered to be very healthy and indicates a financial history with almost no default.
A score lower than 700 indicates some delays in loan payments and any score lower than 500 shows an extremely poor repayment behavior in the past.
If your score is NA or NH, you are either new to the credit system or have no credit transactions in the last two years.
What factors impact your score? How to improve?
Following 4 factors will impact your score decisively:
- Late Payments or defaults in recent past
- High utilization of your credit limit
- Unbalanced portfolio with many unsecured loans
- Seeking excessive credit in a short time
Your payment history will be a major determinant of your CIBIL score.
If you delay or miss your payments on your credit-cards or loans, you will see your score reducing. On the other hand, making payments on time indicates a good financial behavior and hence a higher score.
The other factor you should take into account is your current outstanding on your cards. Don't use too much of your credit limit as it results in a lower score.
Also, a home or an auto loan is better compared to a personal loan or a credit-card. A large number of unsecured loans is bad for your score.
Finally, if you have applied for too many credit-cards or loans in the recent past, your score will reduce temporarily.
To maximize your credit score, follow following best practices
- Never ever delay your payments on your loans or credit cards
- Mix it up. Don't only go for only unsecured loans. If you have a choice between a secured or an unsecured loan, always go for the secured loan
- Do not max out your credit-card limit. Maxing out this limit or going beyond same will negatively impact your score
- Don't apply for too many cards or too many personal loans in a short period of time.
What all other information is covered as part of your CIR?
In addition to your overall score, there are two other sections in your report that you should look at:
Accounts is a history of all your existing or past credit facilities.
For example, your home loan or car loan or credit-card or a personal loan, all of them will be covered in this section.
You will see the account details, the date of opening and closing, current balance if any and the current status of your account.
The Enquiry section lists all banks or lending institutions who have accessed your CIBIL report in past.
You can see the name of lender, the date of enquiry and the enquiry amount.
What to do if some information is wrong?
If any information in your CIBIL report is not accurate, you can raise a dispute here.
Once you submit your dispute, CIBIL will take up to 30 days to resolve it with the lender and once resolved your report will be revised.
One final thing you should know about
CIBIL is not the only credit bureau in India. Equifax and Experian are the other two well known bureaus.
You can get your free reports from these agencies as well in case you have exhausted your once a year limit from CIBIL.