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Banking Awareness Notes : TransUnion CIBIL

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Banking awareness is one of the important aspects of bank recruitment exams. In this article we would be mentioning all the important point about CIBIL.
 
TransUnion CIBIL Limited is India’s first Credit Information Company (CIC) founded in August 2000. The organisation was created to play a critical role in India’s financial system by helping loan providers manage their business.
 
“CIBIL” stands for ‘Credit Information Bureau India Limited’.
 
Chairman & MD : Mr. Satish Pillai
Headquarters : Mumbai, Maharashtra
 
 
Functions of TransUnion CIBIL
 
– Collects and maintains records of an individual’s payments pertaining to loans and credit cards.
– This information is provided to CIBIL by member banks and credit institutions.
– The information is then used to create Credit Information Reports (CIR) and credit scores which are provided to credit institutions in order to help evaluate and approve loan applications.
 
Credit Scores

It is a numerical expression to represent the creditworthiness of an individual.

Banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt.

Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits.

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Lenders also use credit scores to determine which customers are likely to bring in the most revenue.

Divisions of CIBIL

CIBIL houses credit on over 220 million trades across individuals and businesses, organized into two divisions:

1. Consumer Bureau
2. Commercial Bureau and MFI Bureau

 
The CIBIL Score and Report help loan providers identify consumers who are likely to be able to pay back their loans.
For instance, an individual with a credit score above 750 has better bargaining power with the lenders, since he is perceived as a responsible borrower.
Consumers can now access their Credit Scores and CIRs directly from CIBIL and can see for themselves how they are perceived by the lenders before applying for a loan.
Hence, CIBIL empowers both loan providers and individuals to see their financial and credit history more clearly and hence, take better and more informed decisions.
 
Hope this helps.
All the best!

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