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Your next loan could be denied because of your CIBIL report!

Sunday, September 26, 2010

/ by Srikanth Eswaran


So I happened to apply for a car loan at SBI. I was anticipating that a usual home verification would happen and later on the loan would be sanctioned. I was pretty right in my assumptions except that I did not anticipate that the officer who would verify my credentials would come armed with a CIBIL report.
The report she showed me was nothing less than astounding. She pointed out to me on what all loans I had taken since 1999 for a whole period of ten years. My bike loan, esrtwhile car loans, personal loans, credit card spends – everything was in that report neatly outlined. Courtesy CIBIL.
CIBIL is the credit information bureau Inida limited, a company that helps money lenders understand their credit worthiness of their borrowers. Every time you go for a new loan or credit card spend in huge amounts, these details are at regular intervals shared by the lenders (banks) to CIBIL. So in essence there is a history maintained with CIBIL on a regular basis on the new loan(s) you have taken and the status of the old loan(s) you have already borrowed. Each time the lending agency notifies CIBIL that a particular loan has been closed, CIBIL makes the pending amount “0” on that loan, which is technically when the loan is ACTUALLY closed.
However there are few cases where the lending agencies do not notify CIBIL on loan closures, or perhaps more regularly than others, which leads to some inconsistent information about your loans. It is at this point that we as borrowers must go behind these banks, to make them send the closure report to CIBIL so that your credit history is made CLEAN by reflecting the proper status. Also, there are two types of reports that CIBIL generates – a customer copy (which is essentially your copy) and the lender copy (which is what banks prefetch while issuing a new loan to you each time). The former copy is more detailed, has the account numbers, amounts, and types of loan sanctioned, sanctioning authority, etc. The latter also indicates the amounts, and closure status while it does not give the account numbers and other sensitive information to third parties. This is for obvious security reasons of your data not being able to to be misused.
Along with the famous Dun and Bradstreet Corp of the USA, CIBIL has ushered in a new era of helping lenders understand clearly the profile of their borrowers, and borrowers understand clearly their spends and loans they go into to help make them plan more efficiently for their life needs. So then you may ask what is the way to get your own CIBIL report.
The answer is very simple. Go to www.cibil.com and signup as a customer. Needless to say you need to provide valid credentials like address proof, id proof etc. For a meager amount of about less than Rs.200, you can in no time access your credit (loan) information to help yourself better understand what you have been spending on, and how much of your credit history is clean in terms of repayments.
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