How to read and interpret your Credit Information Report (CIR)
We are all familiar with the fear and anxiety that we feel when applying for a loan. After all, it’s the lender who decides whether we can own our dream home, our first car, or whether our children can pursue higher education. In a nutshell, a better life depends on the lender’s decision.
We are unsure of the lender’s criteria to evaluate our application. Is it the size of our income, the number of assets (fixed deposits and investments), or is it our past performance regarding payments with lenders we have a credit facility with? While other factors do play a part in the lender’s decision, our CIBIL Score plays a pivotal role. CIBIL Score is a 3 digit summary of your CIR. Currently, almost all lenders access your CIBIL Score prior to approving loan applications. Naturally, it’s critical that you get a copy of your CIBIL Score and Report and understand it well before applying for a loan.
So, what exactly does your CIR contain?
This section provides the lender your name, date of birth, gender, an identifier (such as PAN, Voter ID or Passport Number, etc.). Go through this information to ensure that key identifiers such as PAN or Passport Number is mentioned correctly.
Your addresses and telephone numbers are provided in this section. Up to 4 addresses are provided on the CIBIL Report. Both the Personal and Contact information sections provide details that indicate who the information on that CIR pertains to.
The employment section provides the lender with your monthly or annual income details as reported by our Members. The reported income is generally one of the first figures reported by a credit institution and not necessarily the updated one.
This section contains the details of your credit facilities like name of the lender/s, the type of credit facilities (home loan, auto loan, credit card etc.), the account number/s, whether single or jointly held, when each account was opened, date of the last payment, loan amount, current balance and most importantly, a month on month record of up to 3 years of your payments. We will cover this more in detail below.
- Check your account details-This contains details such as the lenders name, account number, account type (is it a credit card, personal loan etc), ownership (single/joint/guarantor), date the account was opened/closed and the last date when these details were reported to CIBIL. What to look out for is, if there are any details reflecting in the account that is not factually correct or have never been applied for.
status of the account- The status of the account is mentioned in
the Account Information section. Written off/settled/suit filed cases are not
looked upon favorably by the lender. It is always advisable to have a clean
It is very important to understand the “Settled” and “Written off” terminology. Settled means where there is partial payment (in consent with the lender) made against the total outstanding. Once this is done that means there is no outstanding against your name by that lender. You will notice your amount over due and current balance would have changed to zero.
When one is not able to make payments against the outstanding loan/credit card amount for more than 180 days, the lender is required to “write-off” the amount in question. The lender then proceeds to report this on your CIR.
It is better to have a healthy mix of secured (such as home loan, auto loan) and unsecured loans (such as personal loan, credit cards). Too many unsecured loans may be viewed negatively.
- Check your payment history (Days Past Due-DPD) for every loan or credit card availed-The DPD indicates how many days a payment on that account is late that month. Anything other than “000” or “STD” is considered negative by the lender. Below are the types of asset classification that can appear in the DPD section:
|STD||Standard||Payments are being made within 90 days|
|SMA||Special Mention Account||Special account created for reporting standard account, moving towards Sub-Standard|
|SUB||Sub-Standard||Payments are being made after 90 days|
|DBT||Doubtful||The account has remained a Sub-Standard account for a period of 12 months|
|LSS||Loss||An account where loss has been identified and remains uncollectible|
- On occasion
you may also notice “XXX” reported for your DPD on a certain account
which implies that information for these months has not been reported to CIBIL
by the Banks.
If there is a number in the DPD column, then it means that the payment is late by that many days. So for example if it is 050, then it means the payment is late by 50 days. If it is 000 then it means the payment is as per the due date, so there is no deviation or late payment.
This section provides details regarding loan applications you have made. An enquiry means that a credit institution has requested your credit details from CIBIL. Lenders may tread with caution considering your multiple enquiries in a short span of time, which shows a behaviour of seeking excessive credit. The enquiries made are captured for a period of 7 years.