The CIBIL is the largest credit bureau in the country, and also the first credit information firm in India that was founded in August 2000. It comes under the purview of the Credit Information Companies Regulation Act, passed in 2005. CIBIL collects and manages financial records for individuals and business firms relating to the payments and borrowings made on loans and credit cards.
CIBIL full form is Credit Information Bureau India Limited and it acquires financial records data with the assistance of its bankers and credit institutions as well as with the help of its employees. This firm relies on the support of its associated partners to find relevant information, including bank members & credit institutions, to conduct this search.
CIBIL credit score
A CIBIL credit score is a three-digit number used to determine your creditworthiness based on the credit history information. A credit report is a good indicator of how much credit you may have. This is an overall score that ranges from 300 to 900.
Importance of CIBIL score
- CIBIL plays an integral part in the process of obtaining a loan. Most banks will not lend to individuals who do not have a CIBIL score acceptable to them due to the possibility of default.
- A good CIBIL score can increase the chances of loan approval and result in lower interest rates.
- A high CIBIL score indicates that an individual is financially responsible and has a track record of timely payments and a low credit utilization ratio.
- Individuals with a low credit score will be assumed to have a bad credit history by the bank, and their loan applications are usually refused by the banks or financial institutions.
- CIBIL score can help individuals to understand their credit history and identify areas that need improvement.
- A CIBIL score is a factor that determines your eligibility for a loan. An individual who has a good CIBIL score will be able to obtain a loan more easily.