Page 34 - Banking Finance September 2019

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maintained by them, update regularly on a monthly basis Credit Information Report (CIR) contains following
or at such shorter intervals as may be mutually agreed upon Information of an individual:
between the CI and the CIC. Y Personal information & KYC details

Y Employment details
Consumers Credit Information Report
Y Score with classification of risk
Consumer Credit Information Report (CCIR) & Company
Credit Report (CCR) are basically two types of CIR which are Y Summary of loan accounts & enquiries
meant for Individual and Company respectively. Y Status of loan accounts

Y Individual loan account details
A Consumers Credit Information Report (CCIR) contains
detailed information on the credit you have availed, such Y Nature of repayment
as home loans, credit cards, personal loans, automobile Y Overdue, if any
loans, overdraft facilities.
Y Credit Information Report (CIR) prepared based on the
vast information database pertaining to individual Importance of Credit Score
borrowers. Credit Score is important for an individual as well as for
Banks or any financing/lending institutions. In India, Credit
Y CIR is a vital tool used by credit grantors like Banks, etc.
Score is commonly referred as CIBIL Score.
at the time of new customer acquisitions as well as
granting of additional loans .
Presently, CIBIL Score is India's most trusted credit score
Y CIRs provide factual information on credit histories of model. It is extremely important for lending institutions to
borrowers enabling the financing institutions to make know which customer is likely to manage his loans
objective lending decisions
responsibly. CIBIL studies the borrower's loans and
Y With CIR, credit grantors are better equipped to repayment patterns and predicts whether he/she is likely
identify risk areas, disburse credit faster and with to default in the near future. This minimizes risks for the
greater efficiency and grow business profitably. financial bodies and increases their profitability.

Company Credit Report (CCR) is a record of Company's Credit Credit Score is a numeric summary of credit history. Credit
History. This record is created from the data submitted to Score indicates the "Probability of Default" of a borrower
Credit Information Companies (CICs) by all the lending based on their credit history. The value Credit Score/CIBIL
institutions across the country. It is not a credit rating. It Score ranges between 300 & 900. This score is derived by
provides the information about past payment behavior of using details found in Accounts and Enquiry section of Credit
the company.
Information Report.

Score predicts the likelihood of 91+ days delinquency on one
or more loans in the next twelve months. The higher the
numerical value of the score, lower is the risk profile of the
individual. Individuals who do not have any loan record in
CIBIL database are assigned a default score of-1.

Most of the Banks in India generally consider CIBIL score of
700 and above as a good credit score. Credit Score more
than 750 may be considered as an ideal score as it provides
you power to negotiate good terms on your loan while score
below 650 would attract a higher interest rate. Banks will
take a position not to negotiate or not to reduce the interest
rate.

34 | 2019 | SEPTEMBER | BANKING FINANCE