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One of the revenue generating areas for finance institutions is retail loans segment that includes home loan, personal loan, car loan etc; In recent years, there has been an increase in number of borrowers who are mainly attracted by the easier repayment options, favorable credit terms etc; offered by the lenders. However, an increase in the number of borrowers has resulted in a number of defaulters who do not repay / fully settle the loans. Lenders now rely upon a eligible borrower's credit score, which is generated by CIBIL(www.cibil.com), before granting the loan.

CIBIl is an independent credit rating agency that gives a rating and credit information report of an individual. CIBIL gets information about an individual's credit history from CIBIL member sources like NBFCs, financial institutions, banks etc; Every loan that has not been repaid fully or yet to be settled by the borrower is reflected in the borrower's credit rating. CIBIL report helps the new lenders take an informed decision on whether to grant loans to the borrower or not. A new lender will grant the loan only if he is satisfied with the prospective borrower's credit history.

Among other things, a CIBIL report contains details of all the borrowings availed by an individual in the past, his past payment history, unsettled amount (if any) etc; Since the report is based on the information provided by past lenders, even a part settlement is reflected in the report. For example, a credit card company may agree for a final settlement of Rs. 30000 against an overdue amount of Rs. 50000, the CIBIL report will definitely bring this to the notice of the new lender.

A CIBIL report is like a company's balance sheet. Just like a Company's balance sheet does not comment anything about the financial performance of the company, the CIBIL report does not comment whether a loan should be granted to the individual or not. A CIBIL report merely gives an overview of the borrower's credit history. It is the lender who makes a final decision on granting the loan to an individual based on their internal policies. Thus, whenever an individual apply for a loan, the prospective lender company will get the individual's credit report from CIBIL and will then decide about granting the loan based on the company's internal policies.

One of the revenue generating areas for finance institutions is retail loans segment that includes home loan, personal loan, car loan etc; In recent years, there has been an increase in number of borrowers who are mainly attracted by the easier repayment options, favorable credit terms etc; offered by the lenders. However, an increase in the number of borrowers has resulted in a number of defaulters who do not repay / fully settle the loans. Lenders now rely upon.

Every individual can maintain a clean credit history by ensuring prompt repayments of loan outstanding, ensuring that his loans are commensurate with his annual income and by minimizing the number of loans outstanding. An individual can access his credit report by paying Rs.450 for Credit rating and credit report or Rs.142 for credit report only. A credit score may range from a low of 300(unfavorable score) to a high of 900(favorable score).

A eligible borrower's credit score, which is generated by CIBIL (www.cibil.com), before granting the loan.

CIBIl is an independent credit rating agency that gives a rating and credit information report of an individual. CIBIL gets information about an individual's credit history from CIBIL member sources like NBFCs, financial institutions, banks etc; Every loan that has not been repaid fully or yet to be settled by the borrower is reflected in the borrower's credit rating. CIBIL report helps the new lenders take an informed decision on whether to grant loans to the borrower or not. A new lender will grant the loan only if he is satisfied with the prospective borrower's credit history.

Among other things, a CIBIL report contains details of all the borrowings availed by an individual in the past, his past payment history, unsettled amount(if any) etc; Since the report is based on the information provided by past lenders, even a part settlement is reflected in the report. For example, a credit card company may agree for a final settlement of Rs. 30000 against an overdue amount of Rs. 50000, the CIBIL report will definitely bring this to the notice of the new lender.

A CIBIL report is like a company's balance sheet. Just like a Company's balance sheet does not comment anything about the financial performance of the company, the CIBIL report does not comment whether a loan should be granted to th individual or not. A CIBIL report merely gives an overview of the borrower's credit history. It is the lender who makes a final decision on granting the loan to an individual based on their internal policies. Thus, whenever an individual apply for a loan, the prospective lender company will get the individual's credit report from CIBIL and will then decide about granting the loan based on the company's internal policies.

Every individual can maintain a clean credit history by ensuring prompt repayments of loan outstanding, ensuring that his loans are commensurate with his annual income and by minimizing the number of loans outstanding. An individual can access his credit report by paying Rs.450 for Credit rating and credit report or Rs.142 for credit report only. A credit score may range from a low of 300 (unfavorable score) to a high of 900 (favorable score).

The author, CWA Srinivas K, is the Coach of Vivekananda Coaching Center for CA/ICWA/ACS. Mail:srinivask1202@gmail.com

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