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Banking Awareness Capsule 23: What is CIBIL and How does it function?

Banking Awareness Capsule 23: What is CIBIL and How does it function?

Dear Aspirant,

In this article we are going to learn about CIBIL.

What is CIBIL?

The Credit Information Bureau (India) Ltd, better known as CIBIL, is the premier agency for providing credit reports and scores pertaining to individuals.

CIBIL sources financial data of individuals such as loan and credit card information from leading banks and other financial institutions in India. This data is then presented in the form of a CIBIL credit report, also known as a Credit Information Report (CIR).

CIBIL was incorporated in 2000 and has continued to expand its presence throughout the country. It is backed by TransUnion International and Dun and Bradstreet, which are major global credit bureaus and agencies.

What is CIBIL Score / credit score?

CIBIL Credit score is a numerical expression that is based on your credit files which represents your creditworthiness. It includes all the details of the credit that you have acquired throughout the years.

It also shows how much credit you have taken and how you have repaid it. It will also show if you have missed making any payments or if you have settled any loan. It contains your debt and repayment history along with all your relevant details.

Difference between CIBIL Report and CIBIL Score:

A CIBIL report, also known as a Credit Information Report (CIR) is a document listing all your borrowings and repayment histories.

The CIBIL score or rating is derived out of this data as well as other variables that affect your financial position.

CIBIL scores have become the benchmark for credit worthiness in India.

Why is Credit Information Necessary?

CIBIL is an agency meeting the information needs of banks, financial institutions, housing finance companies, non banking finance companies and credit card companies by having a repository of information about commercial and consumer borrowers.

It is necessary in order to help loan providers evaluate and approve loan applications.

CIBIL was created to play a critical role in India’s financial system, helping loan providers manage their business and helping consumers secure credit quicker and on better terms.

Hope you have now understood what CIBIL is.

Keep your preparation on till we come up with the next banking awareness capsule.

If you are planning to appear for SBI PO Exam 2016, you might find this EBook from Disha Publication helpful:

Click here or on the image to buy this product!

Happy Learning!

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