Importance Of Excellent, Good, Fair And Poor CIBIL Rating

CIBIL or credit information bureau of India limited is a body that gathers and preserves the data of all the credit facilities availed by a borrower with their status. This information is kept for all the leading banks and financial institutions who are members with the bureau. The main motive behind maintaining this data is to help the member banks in decision taking process regarding lending a loan or credit card to anyborrower.

CIBIL keeps and presents this information in form of a report called credit report. All the information present in this report is provided to the bureau by the member institutions only. Not every person can view his/her report. It is only the members who have submitted their entire data to CIBIL who can access acredit report on request.

Credit report contains information about all the loans and credit cards that a customer has and some other details like:

• Personal identification details like name, address, pan no, passport and driving license.
• The repayment status of the account
• Details of all the closed accounts
• No of enquiries made by member banks
• Amount overdue

Depending upon the payment track record of all the current as well as closed accounts that a customer has CIBIL gives rating to every individual in forms of score. It ranges between 100-900 and is a 3 digit code which shows the position of theborrower in terms of making the payments, may it be for a card or for a loan and any other facility obtained. CIBIL ratings are given on the basis of score of an individual.

CIBIL Credit Score Range

It further is divided into 3 broad categories; excellent, good, poor and fair. We can also say that CIBIL scoring id divided into three categories:

» High Score

» Low Score

» No or Zero Score

• When a customer’s account is clean as he has been regular in making all his payments, there is no amount overdue in any of the loan and there has been no bounce or settlement in the closed accounts too, his CIBIL score would be high.
• If the borrower has been a non performer with amount outstanding any of his account and also has settlement with member banks on his accounts, it means that he is not a good customer and his CIBIL score is going to be low.
• If you have taken no loan till and there are no matches in your report for a credit facility, your score will be Zero.

Let us understand what does an excellent, good, poor and fair CIBIL ratings signify:

• If the score given to you by credit bureau is in between 751-900, it is considered to be very high and your rating is excellent.
• Anything between 700-750 is high and the rating is good.
• If it is less than 700 and 500 it is considered to be average in case of 700 and very low for 500 and below. Similarly the CIBIL ratings go on like fair and poor if the score is less than 500.