For Rs 450, individuals can now get a copy of their credit history and credit score - the document which in recent years has become an important determinant of whether an individual is eligible for a loan on not.
On Wednesday, Credit Information Bureau of India (Cibil) - a central agency which collects and maintains borrower information from lenders across the country said that it will make available online the Cibil Transunion score. This score along with a record of credit history is used by lenders as a measure of creditworthiness. The score ranges between 300 and a maximum of 900. A score of 800 is considered good and often eligible for loan by most lenders.
The main advantage of obtaining the report from Cibil is that borrowers can find out in advance how good their score is. If the overall score is low the borrower can strive to improve his profile by paying all future dues on time and bringing down his overall borrowing. Also borrowers can take corrective action if there has been misrepresentation by lenders.
Obtaining the report is a three step process. Borrowers have to log onto the Cibil website www.cibil.com and fill in the online request form and make a payment through either card or online banking. The report is released after the borrower identifies himself by answering three questions based on his credit history.
According to a Cibil spokesperson factors that determine an individual's credit score include timeliness in repayments, extent of borrowing and the extent to which borrowings are unsecured. Interestingly an individual without any loans or credit cards will not have any credit history. As against this a borrower with small loans who has been repaying on time will have a good credit history.
Although Cibil has been around for several years it is only the last two years that lenders have begun to extensively use the bureau as it now has a detailed history of almost the entire borrower population in India. After the passage of the credit information bill, banks have been incorporating in their loan agreement a clause that permits them to share borrower information with the bureau.
Consumers benefit from the bureau as it emboldens lenders to make loans faster without having to independently investigate the borrowers track record. Home loan providers such as HDFC have been using Cibil to ascertain whether the borrower has defaulted in the past or whether he has multiple home loans.