A credit information report is a detailed record of a person’s credit history that includes his identity information, loans and credit card accounts that are opened in his name, payment information, current balances, defaults if any, and enquiries made on the credit. All the member banks and financial institutions registered with the credit bureau, report such information to them on a periodic basis. Your credit score, which is the numeric summary of the repayment history of all the previous and existing credit accounts also forms a part of the credit report.

A good credit history and an excellent credit score helps one to easily get approvals for loans and credit cards. That is because the lenders use it as a basis for their assessment of your ability to repay the loans diligently. People with defaults or insolvency issues are either rejected for loans or charged a high rate of interest. So if you wish to apply for a loan say an SBI home loan in near future, it is good to order your own Credit report and see what chance you stand for the approval of the loan. If you find any discrepancies you can report the mistakes and get them corrected.

Let’s look at some important points and some guidelines that will come in handy if you are applying for your free CIBIL report for the first time

1. There are three credit bureaus in India and each one maintains the records of your credit history. They have their own proprietary algorithms for calculating the credit score. Different lenders place enquiries with different bureaus to access the borrower’s report and judge his repayment abilities. Hence, it is a good idea to check all the reports and not just any one. You may spread the checking from different bureaus over a period of a year, so that you check at least 1 report from a different bureau once every 4 months.

2. RBI has mandated the bureaus to provide one full free credit report on request to individuals who have some credit history. You can get a free report from Experian, Equifax and TransUnion every year.

3. The process of getting the report is displayed on their respective websites. You may either apply for it online or download and fill the form. Some documents that need to be submitted include Name, DOB, Address, Identity authentication etc. The online process is a quicker method, and you even get to track the status of your report for free. In case of offline application credit report is sent through post. So to start off you can order your Free CIBIL report now.

4. Though the bureaus have an automated system to capture the information from the bank, still many times discrepancies do crop up leading to errors in the report. Since the credit score is directly affected by what is recorded in the report, it is necessary for you to scan each and every detail and confirm that it is accurate.

5. Some important details that you must scrutinize include

  • Incorrect personal details
  • Loan accounts in your name that you did not open
  • Loan accounts that are still open, even if you repaid in full
  • Inaccurate balances on loan accounts or amount due on credit cards
  • Amount overdue remarks which states that you haven’t serviced certain loan obligations on time.
  • Credit utilization ratio
  • Credit enquiries

6. If you do find any errors, they can be disputed with the bureau online. You need to download, fill and submit an Online Dispute form. The dispute gets logged in using your personal details and a control number that is assigned when the report is generated. So do not forget to mention the control number of the report for which the dispute is being raised. The credit bureau checks the error with the respective bank. It takes 30-45 days to get a resolution of the dispute.

We need to ensure that the lenders see a true picture of our financial health. Even incorrect personal details should be taken seriously because they may become a reason for identity theft cases. So make it a regular practice to review your report. Make sure it is up to date and accurately reflects the details as it forms the basis of calculating your credit score. A healthy and accurate credit report will lead to a healthy score.

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