Your CIBIL Report is a detailed record of your credit history consisting of your personal information, contact details, employment information, loan account and credit card information, and enquiry information. On the other hand, your CIBIL Score is a 3-digit numeric summary of your CIBIL Report, reflecting your credit worthiness. This is based on your credit history and payment behavior - an integral part of your profile, especially because your past behavior is taken as an indicator of your future actions.
While your CIBIL Report includes the last 36 months of your credit history, your CIBIL Score is based on the last 24 months of your credit behavior. Despite differences between your CIBIL Score and Report, it is important to note that both have a role to play in the approval of your loan application, and lenders depend on both the CIBIL Score and Report to assess your loan eligibility.
Technically, an individual should have more than six months of credit information to be eligible for a CIBIL Score. However, a new-to-credit consumer may not have enough information or credit history to generate a score. In this case, they may receive an NH/NA (No History or Not Available). Over the course of time, they can build their credit footprint with good credit behavior such as timely repayments, a good credit mix, and staying within their credit utilisation limits. This will eventually lead them to a numeric CIBIL Score between 300 and 900. The closer the score is to 900, the higher are the chances of your loan application getting approved. In fact, 79 percent of loans are sanctioned to consumers with a CIBIL Score greater than 750.
This does not mean that you should lose heart if you are new to credit and don't have a score yet, or if you do not have a score greater than 750. Luckily, lenders may look at your CIBIL Report for a larger view of your credit footprint. This may include checking for the days past due on outstanding payments, red flags on loan accounts or the number of enquiries made on your account - all available in your report. This overview allows them to take a better informed decision when underwriting and approving a loan application.
Moreover, in the last two years, select banks and lenders have started rewarding credit-conscious, high-scoring consumers with preferential pricing loans at discounted rates of interest. Now, not only can a high CIBIL Score and healthy CIBIL Report give you access to credit but it can also pave the way for considerable savings.
If you are keen to make your financial goals a reality, you should work towards a CIBIL Score of 750+ and a healthy CIBIL Report. Monitoring your score and report regularly also helps you verify your personal and loan account details are updated correctly, so that you have access to credit when you need it the most.