Tag Archive | CIBIL

Introduction to CIBIL Score in Changing Landscape of Loan & Credit

weThe landscape of loan and credit in India has drastically changed in the recent times. In August 2000, the country’s first credit information company (CIC) came into existence. This organization is named as Credit Information Bureau (India) Limited though it is more popular by its acronym CIBIL. The entity steadfastly collects as well as safe keeps credit records of both individual and corporate borrowers. The range of information includes both borrowing and payment, relevant to credit cards and loans. CIBIL is licensed by the country’s supreme banking authority the Reserve Bank of India (RBI). Moreover, the accredited organization is governed by the Credit Information Companies Regulation Act, 2005.

To cut a long story short, CIBIL provides mutual benefit to both debtors and creditors in dealing with debt issues. In one hand, it helps creditors to run their business more efficiently while on the other, its effort proves helpful for borrowers to seek loans faster and at lucrative interest rates. CIBIL generates a three-digit credit score for every borrower. This score usually ranges from 300 to 900 and a score of 750 and above is considered good. A good credit score equips a borrower with more bargaining power with credit institutions while seeking loans or credit card facility. A credit rating or the score aptly reflects extensive credit history of borrower. Borrowers with sound repayment history are less likely to turn defaulter.

Thanks to the dedicated effort of this premier organization, securing loans and credit cards is much hassle-free these days. As such, it is an undeniable fact that a good CIBIL rating is actually an excellent asset for borrowers to impress credit institutions. There are lots of benefits that good credit score provides. Banks and other credit institutions process loan applications of applicants having higher CIBIL ratings faster. In contrast, the same submitted by folks with low credit rating are usually processed later. Moreover, loans are approved with much lower rates of interest to folks who have impressive credit history. A good credit history also helps a borrower to seek mortgages and housing loans almost instantly.

Thankfully, it is possible to improve one’s credit rating. However, the process is time-consuming and it is mandatory to stick to certain norms and regulations to achieve the objective. There are quite a few dedicated online portals that categorically provide information on the particular aspect. Now, at this stage one may wonder how CIBIL collects the information relevant to credit history of borrowers. The eminent organization has an array of strategic partners, which mostly include banks and credit institutions. These entities are dedicated to furnish necessary information to the CIC on a regular basis.

India is home to a population nothing less than 120 million. Out of this vast populace only a handful few are actually knowledgeable about the world of finance and loans. Thanks to the dedicated and concerted effort of CIBIL, credit awareness among Indians is fast raising. This is an excellent precursor to the nation’s impressive financial prospect ahead. People even from the marginal section of the society are conscious about maintaining good credit rating these days.

This entry was posted on April 3, 2016, in Finance and tagged , .