7 Unbelievable Myth-busters of CIBIL Report
Applicants for loans and other types of credits have very different notions about the CIBIL report, which is the report of the Credit Information Bureau of India Ltd. This report reveals the credit history of an individual and how he/she had coped with the monetary obligations in the past. So, the CIBIL report is like a report card for adults and it has a major role in the financial path of an individual.
For the lenders’ sake, it provides the transparency for the scrutiny of an individual to sanction loan amounts. Most of the lenders also cite problems with the CIBIL score as a reason for rejection of the loan and at times this might not be a serious problem. This CIBIL report is accessible by anyone and a person can check it to understand the reason for rejection.
For further read: Reasons for Rejection of Housing Loans in India
When I wanted to buy one of the flats for sale in Tambaram on a housing loan, I faced the same problem and on further research, I got to realize that there are many myths surrounding the same. The following are some major myths about the CIBIL report that should be noted down:
About low CIBIL score:
One of the common myths that people have is that with a low CIBIL score, one can never get a home loan or apply for a mortgage. This is not completely true because various lenders have various types of policies regarding offering credits.
Primarily, if a bank rejects an application, one can always find out the reason for the rejection and look out for another bank with the necessary documents that give an explanation for the problem.
Maintaining a list of defaulters:
This is another senseless opinion that the bureau has a list of defaulters on record. They don’t have any record as such; however, they do have details about any type of loan and credit history. Like mentioned earlier, the lender analyzes an applicant’s report and have their own policies to sanction the applied loan.
The function of the report:
Another prevalent myth is that the CIBIL score is considered only for approval of housing loans. However, this not true because the score is also considered for sanctioning credit cards and past credit payments are scrutinized for the same.
A CIBIL report is not only for transparency to the lenders of any form of credit, it can also be accessed by the individual to have a proper monetary disciple.
Assets, investments, and the CIBIL score:
Some people have a notion that assets and other investments can impact the CIBIL score of an individual. This isn’t factual because the report features only the details of past credit history, loans and repayment discipline. Savings, other investments, and assets do not impact the score. Unpaid credit balance and bad credit history with regular defaulted repayments can only impact the CIBIL score.
The best ever CIBIL score:
Some of them think that the score of -1 is the best CIBIL score ever. But that is wrong because -1 indicates that the individual has no credit history and has never used any type of credit. Lenders always want some kind of credit history and the behavior towards the repayment. It is better to have a good repayment record rather than having absolutely no past credit records.
Checking the score is bad:
People also say that checking the report at regular intervals can affect the credit score and bring it down. That is a major myth and it is a good habit to check the report at regular intervals if the individual has various loans applied for the individual villas in Chennai and credit forms actively in their tenure.
For instance, there might be delays in the update of the report by the bank or financial institution due to technical discrepancies and the same can impact the individuals CIBIL report. So it is a good practice to keep checking on the score and the report at regular intervals to make sure that they these things do not happen.