‘Good CIBIL score can fetch profitable home loan deals’

Buying a home is one of the most crucial decisions of anyone’s life. This involves thorough planning and research and the most important factor which influences your decision is your financial ability and the home loan. In a bid to get a good home loan deal, it is important to maintain your Credit Information Bureau (India) Limited (CIBIL) Score. Harshala Chandorkar, Sr VP- Consumer Relations, Communication & CIC Compliance, CIBIL, gives suggestions on how to maintain and improve your credit score to get the best home loan deals. She takes up queries on MagicBricks.com’s live chat forum – GuruTalk. The topic of the discussion was ‘How to improve CIBIL scores to get the best home loan deal’.

While discussing how important is the credit score, Chandorkar says, “Banks access credit reports and scores from CIBIL to evaluate the credit worthiness of borrowers. The report and the score has become an important tool which is used by all the banks and financial institutions.”

So how does it function? CIBIL collates credit information from all banks and financial institutions. They share information pertaining to all the loans and credit cards with CIBIL on a monthly basis. A Credit Report is a month-on-month record of an individual’s complete loan-related EMI (home loans, personal loans, automobile loans and so on), credit card or overdraft payments.

She observed that generally a CIBIL TransUnion Score of 750 and above is considered a good score. However, each bank has its own cut off score, says she.

So, what are the opportunities and challenges for a good credit rating? CIBIL does give a credit rating but computes a credit score based on the credit history of an individual. Chandorkar states that the credit score is calculated based on the following factors in your credit history:

- Credit Utilization: How much credit is this consumer using?
- Defaulting: How many accounts are past due – by how many days and by how much?
- Number of inquiries: Has this consumer applied for additional credit lines?
- Trade Attributes: How old are this consumer’s lines of credit? What type of credit does he have? For example, Does the consumer have a good mix of credit or is it all credit cards?

“Some of the benefits of a good credit history and good score are speedier access to credit objective decisions, negotiate for better credit terms, build reputational collateral for the future”, she says.


Source: MagicBricks.com Bureau

What do you do when you spot a mistake on your credit report?

Typically, you check your credit report when your loan gets rejected and the loan provider tells you it’s because of some information on your credit report. But there is no need to panic! Mistakes on a credit report can be easily corrected with the CIBIL’s help. All you need to do is:

a) Purchase your CIBIL credit report

b) Identify the erroneous information

c) Provide name, address, date of birth, an Control Number and the nature of the error on the credit bureau’s website. This is known as a ‘Dispute Request’ in credit bureau parlance.

The Control Number is a unique 9-digit number found on the top right hand side of your CIBIL Credit Information Report and is generated every time a credit report is generated. It is very important to provide this number to the bureau, as it helps identify the CIBIL credit report on which you would like to ‘dispute’ information.


          

Housing Loan, Bank Loan rejected? Rectify CIBIL Credit Report. Credit Information Bureau (India) Ltd. Apply and Get CIBIL Credit report.

The Credit Information Bureau (India) Ltd (CIBIL) now allows individuals access to their credit information reports. Home loan seekers can access their credit information details prepared by CIBIL. In case of any mistakes,they can be rectified. Previously,a borrower used to get credit information from the bank where he applied for the home loan.A home loan application was liable to be rejected on account of negative or poor scoring by CIBIL.The lenders never provided the CIR to borrowers.

The Credit Information Bureau (India) Ltd (CIBIL) now allows individuals access to their credit information reports (CIR). Home loan seekers can access their credit information details prepared by CIBIL.

CIBIL'S CREDIT REPORT INCLUDES:

Name and address of borrower Identification and PAN numbers Passport details Date of birth Records of all the credit facilities availed by the borrower Past payment history Amounts overdue Number of inquiries made on that borrower by different mem bers Suits filed and their status The CIR does not contain Income and revenue details Amounts deposited with banks Details of assets Details of investment

Now,individuals can access their credit information as analysed by CIBIL. In case of any mistakes,they can be rectified.

Previously,a borrower used to get credit information from the bank where he applied for the home loan.A home loan application was liable to be rejected on account of negative or poor scoring by CIBIL.The lenders never provided the CIR to borrowers. Once a borrower found out that the credit information was incorrect,on his request,the lender would provide him a nine digit unique borrower control number.

With the control number,the borrower was supposed to contact CIBIL to get the exact details related to the negative or poor scoring details.Many times,due to wrong reporting by member organisations,it was found that the CIBIL report was incorrect.In order to get the mistakes rectified,the borrower had to go through a long process.

A borrower can now access his CIR directly from CIBIL.A CIR is a record of the credit payment history compiled from information received from credit institutions.The purpose is to help credit institutions make informed lending decisions - quickly and objectively - and enable faster processing of credit applications to help provide quicker access to credit at better terms.

In order to get the report,one needs to fill up a requisition form available on CIBIL's website (www.cibil.com). After filling the form,you have to provide self-attested copies of some documents to CIBIL.The documents needed with the application are identity proof and address proof.



With the new base rate system of interest rates coming into effect,it would be all the more beneficial for home loan borrowers.The interest rates will henceforth be based on the base rate plus a premium depending on the credit rating of the borrower.A good credit rating helps in getting a loan at a lower interest rate as compared to a loan based on a bad credit rating.