Monday, February 23, 2009

Your credit score, CIBIL & getting your credit report

First let's try and understand what's a credit score. Wikipedia has a very technical definition for it:

A credit score is a numerical expression based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person. A credit score is primarily based on credit report information, typically sourced from credit bureaus.

Confused?
In simple terms, the credit score is calculated based upon your history of availing debt/loans/credit from various sources ( like Banks, finance companies, lease companies ), and your history of repaying that debt. The better your credit score, it means less tarnished is your credit history.

In USA if your credit score is very good you can get loans at 1-1.5% lesser than the usual rates. I don't know if that's the case in India as well. I have heard that even telecom companies check your credit score before providing you with an post-paid connection.

Presently there is only one CIC ( Credit Information company ) in India i.e. CIBIL. CRISIL also has plans to enter this business.

All members of a CIC ( like Banks, finance & credit card companies ) submit reports relating to their customers to the CIC. Now when the same subscriber applies for a new loan or credit card to the same or a different bank, they can access his credit report from the CIC and decide whether to issue him a loan or not. Main points they lookout for is amount of credit already availed, plus any history of defaults.

This is just a brief introduction to credit score. You can search on Google to find out more about credit score and its importance. Also another thing you will be interested in is improving your credit score.

Who can access your credit report?
All members of the CIC ( like Banks, finance & credit card companies ) can access your credit report. But RBI has also mandated that an individual must be able to access his/her credit report ( this info sourced from the RTI advocacy group Hum Janenge and this press release found on the CIBIL website ).

But I could not find the exact procedure to get the credit report on the CIBIL website. I believe we have to write to CIBIL to know the exact procedure for obtaining our own credit report.

Here are their contact details:

Email : info@cibil.com

CREDIT INFORMATION BUREAU (INDIA) LIMITED
Hoechst House, 6th Floor,
193 Backbay Reclamation,
Nariman Point,
Mumbai 400 021

Do write to them, and let me and others readers of this blog know, the procedure to obtain the credit report.

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