Credit Report is popular among the western countries to asses an applicant for the loans. A third party company maintains the whole data of the loans and credit information from the banks. Credit Information company creates a own strategy to evaluate the customer if their credit history is good. The report is shared to the banks if a customer is seeking for a loan. In India, this system of Credit Report or Credit history introduced by CIBIL to find the credit history for a customer. After reading this article you will realize the importance of this new system. Please post your thoughts in the comments section. Subscribe to our future articles here.
What is Credit Report?
If you are holding account with SBI for the period of five years. You would have done so many credit card transactions and possibly availing personal loans with the same bank or any other bank which you have repaid on time or with any penalty amount. These are all the details about you as the customer with SBI and it tells about your honesty on repaying the loans and what is your eligibility on repaying the loans.
A report which contains all the financial transaction details about a customer irrespective of banks is called as Credit Report. This report will be very useful for the banks to decide whether they can issue a credit card to that particular customer or whether he will be pay the loans without cheating the bank. It will be good for customers and banks to process the application without making much delay. Nowadays, all the banks perform a CIBIL as the first step towards processing a loan application. If the score on the CIBIL is good enough, then only banks wants to offer a loan, otherwise the loan application will be rejected. This makes the customers more careful on avoiding default payment. This will be marked as the negative score on the customers credit history.
Credit Report from CIBIL?
Credit Information Bureau of India Limited (CIBIL) is a company well known for maintaining the history of each customers. All the banks submit their customer details to CIBIL to share with othe banks. At present there is no system to check for repayment history of a customer. It makes difficult for the banks to use these data.
Few weeks ago CIBIL announced that introduced a manual system to provide consumers with their own credit history on a test basis. A written communication from CIBIL has clarified that CIBIL has started offering Consumer disclosures through an interim solution. This interim solution is a testing phase and we will be able to operational the full-fledged Consumer Relations System basis our learning from this phase.
CIBIL is also developing the infrastructure, systems and processes for an automated solution that would be needed to enable an individual direct access to their Credit Reports from CIBIL on-line . The full-fledged Consumer Relations System will have world-class features that will allow consumers to access their report on-line and banks to respond to errors via an on-line maintenance tool. The automated phase is expected to be ready by the beginning of next fiscal year.
CIBIL is one among 4 credit bureaus that have been licensed by the RBI under the Credit Information Companies Regulations Act, 2005 (CICRA). Almost all of the major lenders provide details of the credit facilities given by them to their customers as well as the amounts that have fallen due and the repayment made by the customers on a periodical basis (monthly or quarterly). CIBIL collates and aggregates this information. Thank you for reading this article.
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