No history
Nothing to summarise
A borrower who has never taken credit has no history to summarise.
Net Worth & Solvency Glossary · Lending
What a Credit Information Report (CIBIL) Shows a Lender
noun · also searched as "CIBIL report" and "credit bureau report" · one record per borrower, kept by each bureau
Definition
A credit information report is the record a credit information company (a credit bureau) keeps of a person's or business's borrowing and repayment, built from what lenders report to it. In India it is often called a "CIBIL report" after the best-known bureau.
It shows how a borrower has repaid. It does not show what the borrower owns.
Showsrepayment conduct, facility by facility
Does not showassets, income or net worth
What the report lists
For each credit facility a member lender has reported
- The sanctioned amount and the balance outstanding
- The repayment historymonth by month
- Enquiries made by other lenders
- Settlements and write-offswhich stay visible for years
The score is a summary of that history, not an assessment of means.
What it says
01What a credit bureau record says about a borrower
A report lists each credit facility a member lender has reported. Four kinds of entry, and how a lender reads each one.
Entry on the report, and how it is read
The four entries a lender reads for every facility on the record
- Sanctioned amount and balance outstandingfor each facility reportedHow much credit is already in use against how much was granted.
- Repayment historymonth by monthWhether instalments were paid when due, month after month.
- Enquiries made by other lenderseach time a lender pulls the reportSeveral applications in quick succession read badly.
- Settlements and write-offsstay visible for yearsRead more harshly than a late payment.
Poor history
A record of late or unpaid dues
A different problem from having no history at all, and the one the score is built to summarise.
Joint facilities. They usually appear in full on each borrower's report rather than by share, so a co-applicant can carry the whole outstanding amount on their own record.
When a bank speaks of the "CIBIL report" in a loan file, it means this record, pulled with the applicant's consent.
Not the same thing
02Why a clean bureau report is no substitute for certified net worth
The two documents describe different risks.
Bureau report
the record of past conduct- What it answers
- Has the borrower paid what they took on so far? A clean report says yes. It says nothing about whether they could meet a much larger obligation, or what a lender could recover if they could not.
- Who produces it
- Generated by the bureau from lender submissions, without the borrower's involvement.
- What it leaves out
- Assets, income and net worth. Borrowings from relatives and liabilities never reported to a bureau stay invisible.
Net worth certificate
the certified statement of means- What it answers
- What the borrower owns and owes at a date, net, from records. It is the document for the question a clean report leaves open: what stands behind a larger obligation.
- Who produces it
- Prepared by a chartered accountant from records the borrower supplies, and the CA is answerable for it.
- What it leaves out
- Repayment conduct. It does not say whether past instalments were paid on time; that is the report's job.
- A salaried borrower with a spotless record
- and no assets
The report reads well; the means behind a larger loan are thin.
- A business owner with a patchy record
- and unencumbered property
The report reads badly; the means are there and can be recovered against.
That is why a lender assessing a secured facility often wants both, and asks for a net worth certificate for a bank loan even when the score is excellent.
Who keeps the record
03CIBIL, Equifax, Experian and CRIF High Mark under the CIC Regulation Act
The credit information companies operating in India include these four. They work under the Credit Information Companies (Regulation) Act.
The usual nameCIBILThe name most people use for the report itself.
Also operatingEquifaxA separate record of the same borrower.
Also operatingExperianA separate record of the same borrower.
Also operatingCRIF High MarkA separate record of the same borrower.
The Act. All four work under the Credit Information Companies (Regulation) Act.
Is CIBIL government or private?
CIBIL is a company, not a government department. It operates under the same regulatory framework as the other three.
Histories can differ across bureaus
Lenders subscribe to one or more bureaus, not necessarily all. The same borrower can therefore show slightly different histories across bureaus, and a facility from a lender that reports to only one will not appear on the others.
Which bureau the bank pulled decides what it saw.A closed loan can still show as outstanding
Reports are updated on a cycle, not in real time, so a loan closed recently may still show as outstanding.
What settles it: a closure letter from the lender, while the bureau catches up.Check and correct before the application
Individuals are entitled to one free full credit report each calendar year from each credit information company. The Reserve Bank of India required this from 1 January 2017.
Correcting an error before an application, rather than during one, avoids delay.Written by Subham Jhunjhunwala · Reviewed by CA Sundram Gupta
Sources: Reserve Bank of India, free annual credit report from each credit information company, from 1 January 2017 (rbi.org.in). This entry describes Indian practice in general terms.
Need help with a certificate for a loan file? See our Net Worth Certificate for Bank Loan.The certified figure a lender reads beside the bureau report.