Credit Rating

Financial Services
CIBIL: Credit Information Bureau (India) Limited

• India’s first Credit Information Bureau (India) Limited , incorporated

in year 2000.
• Established by the Government of India and the RBI
• The legislation has enabled banks to submit data to CIBIL without
obtaining borrower’s consent.
• It is a repository of factual information on the credit history and
repayment records of commercial and consumer borrowers
CIBIL
MAJOR OBJECTIVES:
• To provide comprehensive credit information by gathering credit
related information regarding commercial and consumer borrowers.
• To maintain a database of this information and selling it in the form of
credit reports to a closed user group of Members.
CIBIL
HOW DOES CIBIL OPERATES:
• Collect sand maintains monthly credit information reports(CIR) from banks and financial
institutions
• These reports contains individual loans and credit card payments history
• Based on CIR a credit scores are generated.
• These credit scores are used by the lenders during the loan evaluation process
• Allows the credit grantors to have access to its database to search and gain a complete picture of the payment
history of a credit applicant.
• Reports could be obtained from CIBIL only by Members who contribute all data about the borrowers
•  CIBIL collects commercial and consumer credit-related data and collates such data to create and distribute credit
reports to Members
• CIBIL does not grant or deny credit.
CIBIL
MEMBERS OF CIBIL:
• Banks
• Financial Institutions
• Non Banking Financial Companies
• Housing Finance Companies
• State Financial Corporations
• Credit Card Companies
CIBIL promotors
CIBIL companies in India
• TransUnion CIBIL is one of four credit rating agencies in India.
• Other bureaus include Experian, CRIF High Mark and Equifax.
• The CIBIL score is a three-digit numeric summary of a consumer's
credit history and a reflection of the person's credit profile.
• The credit score is an important metric used by lenders to evaluate a
potential borrower's creditworthiness.
Credit score
• Credit score is a summary of credit history and it is a three digit
number.
• The value ranges between 300 to 900
• It is derived by using details found in the accounts and enquiry section
on individual credit information report
• It indicates probability of default of borrower based on his credit
history
Importance of CIBIL score
• CIBIL score is the first check that the
lender checks when they are
evaluating loan application
• If the score is grater than 750 , 90%
of the loans got approved.
Loan determination criteria
Loan rejections and disputes
• Individual can purchase the CIBIL score and report.
• If there are any discrepancies/ errors raise a dispute
• Errors like
• Personal information errors, same name reflecting more than once
• Account information : account type, loan type, status, date of last payment,
current balance , over due
• Duplicate accounts