Decoding your CIBIL CIR

If you have just bought your CIBIL credit report and need some help understanding it or if you are considering forking out for one and want to know what you will get,the following write up is for you:

Here is the information found on a CIBIL CIR:

Payment history

Days Past Due (DPD) appears in the account(s) section of your CIR. It appears with one other piece of information — the month and year of payment. DPD indicates by how many days a payment on that account is late that month. Anything other than ‘000’ is considered negative by a lender. Up to 36 months of this payment history (with the most recent month displayed first) are provided in this section.

For example, if you have taken a loan whose payments started in August 2010 and are three months late on a payment due at the end of September 2010, your DPD may be reflected as follows:

DPD	090	060	030	000	000
Month/Year	12/10	11/10	10/10	09/10	08/10

As  your credit history helps a lender determine your ability to pay additional debt based on your past performance, having DPD other that ‘000’ on your CIR will imply that you have not met your financial obligations in the past. So, lenders may view accounts that are reported with DPD as anything other than ‘000’ negatively and this may affect your chances of a loan approval. Also some lenders report DPD as per the asset classification norms defined by RBI, which are as follows:

Any classification other than ‘STD’ is viewed negatively by lenders during the loan application process. Sometimes you may see ‘XXX’ reported for your DPD on a certain account. This means that the lender has not reported that months DPD to Cibil and hence, there’s no need for worry.

Current balances

Also, appearing in the account(s) section of your CIR, the current balances on various loans indicate the depth of your debt. The sum of your current balances helps a lender determine your strength to take on additional EMIs, in relation to your current income. Naturally, lower the current balance, the better the chance of your loan getting approved.

New credit facilities

If a lender observes that you have recently been sanctioned a number of new credit facilities, it will mean that your monthly outflow in terms of EMIs, are likely to have increased. Hence, it may have a negative impact on your loan application.

A number of new enquiries

If you have applied for a number of loans in the recent past, the chances of your loan getting approved are likely to suffer because, this credit behaviour indicates that you are ‘credit hungry’ and implies that you are in an urgent need for money. It is likely to make lenders more cautious while evaluating your application.This also leads to another p0int-while it is necessary to check your CIR regularly to ensure that the ‘reputational collateral’ you have painstakingly built over the years is reflected accurately in your CIR so that you can access credit faster and at better terms don’t be cheap and try to save on the fee by applying for loans needlessly from banks  just to demand your free copy of the CIR.Only by buying directly from CIR and forking out the cash are you certain that your inquiries are not added to your CIR.