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How is CIBIL Credit Report Generated?

How is CIBIL Credit Report Generated?

finance
July 24, 2022
5 min read
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How is CIBIL Credit Report Generated?
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A CIBIL credit report is an individual’s financial report card. Everything related to your financial activities is listed on your credit report by CIBIL. Based on the financial activities, a 3-digit number is generated, known as CIBIL credit score. Understanding your credit report and how often it is generated by CIBIL – the Credit Bureau, will help you build your credit score. 

TransUnion CIBIL is the first credit bureau in the nation that creates a CIBIL credit report. Your CIBIL credit report contains details on all of your loans (home, auto, and personal), credit cards, bill payments, and inquiries. In short, it contains a thorough synopsis of your entire credit history. Basis all these information, the credit reference agency calculates a score, known as CIBIL score. In a way, this score reflects your creditworthiness. Higher the CIBIL credit score, the better and responsible borrower you are. 

What are the Components that Goes into Generating a CIBIL Credit Report?

When a CIBIL credit report is generated, a lot of factors are taken into consideration. Let us find out more about these components that helps in generating your CIBIL credit score: 

  1. Repayment History
    This is the most crucial factor that is taken into account for generating your CIBIL credit report. A poor credit history is always considered as a risky borrower profile by banks, lenders and NBFCs. A lender is required to report any loan or credit you take out to CIBIL and post which all the repayment history of that credit is shared by the bank with CIBIL. If you pay regularly and on time, you will have an excellent CIBIL credit report. However, if you fail to pay your debts on time, whether its for a credit card, or for a loan, it will be considered to generate your credit report and your CIBIL credit score is calculated accordingly. 
  2. Credit Utilisation Ratio
    Lenders generally do not extend a line of credit to borrowers who have a credit utilisation ratio of more than 35%. In order to determine a loan applicant's ability to repay based on income, this ratio is taken into consideration. When you spend more than what you earn using your credit card or any other form of credit, the same is taken into consideration while generation your CIBIL credit report. And your credit score goes a bit lower if your debt-to-income ratio is higher. 
  3. Multiple Credit/Loan Applications 
    Lenders will always be cautious if you have too many loans in your name, such as a home loan, personal loan, a car loan, and credit cards on top of these. Always close one loan before taking out the next one. Your CIBIL credit report is reviewed every time you apply for a credit card or a loan. More number of loans will impact your CIBIL credit score. Also, it may give the lenders an impression that you are credit hungry. To help your CIBIL credit report to become excellent, pay off your existing loan before moving to the next one. 
    Learn how to read a credit report. 

How to Generate a CIBIL Credit Report?

As per the mandate by the Reserve Bank of India in the year 2017, every credit agency in the nation will have to provide one free complete credit report to the consumers with credit history each calendar year. You can generate your free CIBIL credit report by visiting the company's official website. 

Further, you will have to choose between three different subscription options to generate your CIBIL credit report:

  1. 1 Month: Rs. 550 
  2. 6 Months: Rs. 800 
  3. 12 Months: Rs. 1,200 

Here are 3 simple steps to help you generate your CIBIL credit report: 

Step 1: Account Creation 

After choosing a subscription plan, you will have to create an account by providing basic details such as your email address, name, mobile number, date of birth, and identity documentation (such as a driver's licence, PAN card, passport, voter ID, or ration card number). 

Step 2: Verification

Verify your identification in order to validate the information you have provided while creating the account. You may either get an OTP by CIBIL or you will be inquired about something else related to you to establish your identity.

Step 3: Make the Payment 

Make the payment for generating your CIBIL credit report. Checking your CIBIL credit score occasionally is a smart financial habit because it gives you an idea of your credit profile.

Your financial integrity is measured using a CIBIL credit report. It is an indicator that assists a lender to know whether to grant a loan or not - based on your CIBIL credit score. With a better or higher CIBIL score, your will be considered as a creditworthy consumers. And as such consumers are assets for every financial institution, you stand a chance to compare the offers from other lenders that you have received and negotiate with the authority. 

However, remember that a bad CIBIL credit score is not the end of the world. There are various things you can do to improve your CIBIL credit score. Handle all your debts smartly and try to pay off your loans and credit cards regularly and on time to help build your credit score. 

FAQs Related to CIBIL Credit Report Generation

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Who makes the CIBIL credit report?

CIBIL – Credit Information Bureau (India) Limited makes the CIBIL credit report. The credit reference agency collects all the financial history pertaining to an individual, post which their credit report is generated. And based on the financial activities and the scoring model, CIBIL also assigns a credit score to the consumer. 

How long does it take to generate a CIBIL score?

If you do not have a credit history, it may take 6 months to a year, approximately to build a CIBIL credit score. However, the actual time taken to build a credit history also depends on how you manage your finances. 

If you have already have a credit history with CIBIL, however, you have a low credit score, then it may take 4-12 months for you to improve your CIBIL credit score. 

Can I generate my CIBIL credit report without a score?

Yes, absolutely. You can generate your CIBIL credit report even without a score. Remember, your CIBIL credit profile can be generated irrespective of having a good or bad credit score. 

Is a CIBIL credit report generated every month?

There is no restriction on how often you can generate your CIBIL credit report. However, as CIBIL only receives information on a monthly basis, you might not see any changes until 30 days have elapsed between reports if you wish to generate a credit report within 30 days.

What are the documents required for generating a CIBIL credit report?

You will be needing government approved proof of address and proof of identity to generate a CIBIL credit report. The following documents are required while creating an account on CIBIL official website in the process to generate a credit report:

  1. For Identity Proof - PAN or Passport or Voter's ID
  2. For Address Proof - Telephone Bill or Passport or Bank Statement or Electricity Bill or Credit Card Statement.