How to Read and Analyse Your CIBIL Report Effectively 

Introduction

If you wish to know more about your credit history and how you are doing in terms of your financial credibility, you need to read your CIBIL report. A CIBIL report can give you the lowdown on your credit score, personal details, and overall credit history.

If you are unsure how to read the CIBIL report, this article will walk you through how to analyse it effectively.

What is the CIBIL report? 

Also known as a Credit Information Report, the CIBIL Report offers a detailed summary of your credit history, including your CIBIL score. This report is published by the Credit Information Bureau India Limited (CIBIL) and includes essential details such as your credit card usage, repayments, and more. You can easily obtain your CIBIL report by applying on the official CIBIL website.

How to read a CIBIL score report? 

The CIBIL report contains a lot of information. Here's a breakdown of the key sections and what they signify:

1. CIBIL score 

Your CIBIL score is a three-digit number that typically ranges from 300 to 900. The higher your score, the better your credit standing. A strong score indicates that you have a healthy credit history, including timely repayments, low credit utilisation, and fewer inquiries. It signifies that you are a responsible borrower. On the other hand, a lower score may point to missed payments, defaults, or high credit usage, which can hurt your chances of getting approved for loans or credit cards. 

How to analyse: 

Check if your score is above 750, as this is generally considered a very good score for loan approvals and better interest rates. If it is lower, you must improve your score by making better financial decisions. 

2. Account information 

This section provides a detailed record of all your credit facilities, including loans and credit cards. Here's what it includes:

• The lender’s name that issued the loan or credit card
• Type of credit such as a home loan, personal loan, or credit card
• Account numbers linked to each credit account
• Ownership type, such as if the account is held individually or jointly
• Opening date of the account 
• Amount overdue if any amount is unpaid
• The last payment date on which a payment was made
• Loan amount or credit limit 
• Current balance
• Repayment history record of up to 36 months, including details of if you paid the dues on time, missed a payment or defaulted

How to analyse: Look for any missed payments, high outstanding balances, or overdue amounts as these can lower your score. 

3. Personal/profile information

This section contains information about your personal details. This information is reported by banks and financial institutions and may include the following:  

• Personal information, such as your name, date of birth, and gender
• Email addresses 
• Identification details, such as your Permanent Account Number (PAN), voter ID, driver’s license, and passport number
• Address category, such as residential, official, permanent or temporary

How to analyse: Verify that all personal and identification details are accurate and up to date. In case of any errors, make sure to contact CIBIL for a rectification. 

4. Contact information

The CIBIL report shows your contact information, including your mobile numbers, addresses, and email addresses.

How to analyse: Ensure your contact details are up-to-date and consistent across all accounts. 

5. Employment Information 

This section has details of your occupation and income. It specifies if you are salaried or self-employed. It also contains your income, as declared at the time of opening an account.  

How to analyse: Check if the employment type and reported income match your actual job and income at the time.  

6. Enquiry information 

Lenders check your CIBIL report when you apply for a loan or a credit card. These checks are known as enquiries and are mentioned in your report. This section contains information about all the enquiries made, including:

• Name of the lender
• Date of enquiry
• Type of credit applied  
• Amount requested

How to analyse: Too many recent enquiries can be detrimental as they show that you have applied for several loans or credit cards. You must avoid too many enquiries and try to space out your loan or credit applications.

Things you need to know while analysing your credit report 

While reviewing your CIBIL report, you may come across a few abbreviations or terms that seem confusing at first. Here’s a quick guide to help you understand them:

• STD (Standard): This indicates a credit account where you have been making timely payments without any delays. 
• LSS (Lender Settled Status): This status appears when you negotiate with the lender and settle your dues by paying a reduced amount. While it may close the account, it can negatively impact your credit score.
• DPD (Days Past Due): This shows the number of days a payment is overdue. The higher the DPD figure, the more delay there is. 
• NPA (Non-Performing Asset): Accounts that are overdue by more than 90 days fall under this category. NPAs are indicative of default issues on your part and can heavily affect your creditworthiness. 

How to improve your CIBIL score?

Here’s how you can improve your CIBIL score:

• Pay bills on time: Late payments negatively impact your credit score. So, always ensure to clear your dues on time. 
• Avoid multiple loan or credit enquiries: Each time you apply for a new loan or credit card, lenders perform a hard inquiry. Too many inquiries made over a short duration can hurt your credit score. So, avoid applying for multiple loans and credit cards at once. 
• Maintain a low credit utilisation ratio: This refers to the amount of credit you are actually using compared to your total available credit limit. A high ratio can lower your score. Try to keep your credit utilisation ratio low to boost your score and show you are not overly dependent on loans and credit cards. 
• Check and report errors: There can be errors and falsely reported data on your report, which can impact your credit score. Review your report periodically to ensure all details are accurate. 

Conclusion 

Now that you know how to read the CIBIL report, make it a habit to check it regularly. This helps you stay informed about your credit health and take timely corrective action if anything seems off. This can be helpful when applying for a loan or credit card and qualify you for lower interest rates.