[Pequod]

Originally Posted by Pancham

Guys, apologies for the late reply...

Experian and Transunion CIBIL are two different agencies, and scores are mutually exclusive.
Regarding difference in score, I have seen quite a few cases where cibil reports/scores generated by the consumer vary from those generated by Bank/FI, sometimes as high as 200-300 points.

The best course for you would be to take the matter up with SBI and get them to report the correct position of your loan to CIBIL. They cannot be absolved of responsibility for this. Please note however that after updating, it might take up to 2-3 months for the score to improve.

Originally Posted by jinojohnt

5. No outstanding loans

This. Having no loans also results in score decreasing over a period of time, since CIBIL is essentially your 'credit history'.

[jayantvs]

Originally Posted by jinojohnt

.........Am I missing something?

Originally Posted by akhil994

......So your score has not decreased to 823 from 900 , but rather it has climbed up from the base score to 823, which is an excellent score.

What Akhil mentioned is correct. The CIBIL score starts from a lower value (either 1 or 750) and goes up, not the other way around.

Originally Posted by StarrySky

Is your entire loan history available with CIBIL? .....

Ideally it should contain the entire loan history. It could have happened that the banks did not report the transaction. Since you mentioned that you have an outstanding home loan, the score will improve in few months.

[vinit.merchant]

I just checked my score out of curiosity. And it came to 833.
How is it calculated is what confuses me. Because I have a home loan since 5 years now. A car loan started 8 months back. A couple of credit cards, one of which is hardly used and the other was used only to accumulate points, up until July, after which Diners devalued the points. So now it is just used bare minumum.

Contrary to this, one of my colleague who probably earns double of me at least, has no home loans (stays on rent) and a sedan he bought a year back was entirely on credit card, paid on settlement date without delay. But still his score is around 770. How is that possible?
Do they consider the value of the home as an asset value and hence work out that I have a better borrowing to net worth ratio?

PS: It surprisingly had the entire history of my loan. Even a car loan applied for in 2005 but later booking cancelled also appeared there, something which even I had forgotten about. They also displayed an overdraft facility attached to my savings account by Citibank on its own, and on complaining was removed.

How I wish I had known of this score when taking the car loan. I could have asked them to shave off another 0.5 off the loan. ROI is 9.5%

[jayantvs]

Originally Posted by vinit.merchant

.....Do they consider the value of the home as an asset value and hence work out that I have a better borrowing to net worth ratio?...

The purchase of the Sedan would have spiked up the credit utilization on the credit card which impacts the credit score negatively. Even after repayment this takes some time to get back to previous level as compared to a secured loan like Home or Auto loan.

[jinojohnt]

Originally Posted by StarrySky

Is your entire loan history available with CIBIL? My score is similar to yours (I have an outstanding home loan). I have taken and closed loans for various purposes earlier like you have done, but these do not appear in my "Account Information" in CIBIL website. Two of my friends have their (closed) loans dating 7-10 years back listed in CIBIL website. Both have outstanding loans now, but their scores are above 850.

I looked at the free annual report, which doesn't contain details. I need to pay for detailed report, hence not able to verify whether the entire history is shown.

[StarrySky]

Originally Posted by jinojohnt

I looked at the free annual report, which doesn't contain details. I need to pay for detailed report, hence not able to verify whether the entire history is shown.

The "View Report -> Account Information" link shows my outstanding loans. For my friends, it shows their old loan information as well. None of us have opted for the paid service.

[appuchan]

Recently happened to look up my CIBIL score. It shows as 883, which looks pretty good. I just have a home loan currently being paid regularly. No credit cards or other loans. Btw, I am currently settled in US and my credit score here is 795. Both seems to use similar scale.

[am1m]

I'm curious, what if one has never taken out a credit card or never applied for a loan? I've heard that affects one's credit score negatively. So what are the consequences, apart from probably being rated lower when trying to apply for a loan in the future? Does that get offset if one has a decent monthly income and personal assets in the form of a house, etc?

[appuchan]

Originally Posted by am1m

I'm curious, what if one has never taken out a credit card or never applied for a loan? I've heard that affects one's credit score negatively. So what are the consequences, apart from probably being rated lower when trying to apply for a loan in the future? Does that get offset if one has a decent monthly income and personal assets in the form of a house, etc?

Not sure how it is calculated in India. In US, not having any loan/CC indicates that he/she may not have experience in handling debt, hence possible risk and score may be low. Usually other aspects such as a income, bank balance, owned property etc does not get counted in credit score, as the name implies it is related to credit.

[V.Narayan]

^^^^
My question is same as am1m above. I have never taken a loan since 2001 and pay my 2 credit cards on due date through auto debit. I assume this means my CIBIL score is weak or zero? Right? Why does CIBIL rate me if I have not taken a loan.

[libranof1987]

Originally Posted by am1m

I'm curious, what if one has never taken out a credit card or never applied for a loan? I've heard that affects one's credit score negatively. So what are the consequences, apart from probably being rated lower when trying to apply for a loan in the future? Does that get offset if one has a decent monthly income and personal assets in the form of a house, etc?

On platforms such as PaisaBazaar that offer free CIBIL report, one of the factors listed as affecting the credit score is the no. of accounts (credit cards, loans). Income, assets are not debt, so they don't get counted towards your score. My guess is you'll have some default score.

For eg. when Indians travel to the US and get a SSN (that makes them eligible to get a credit score), everyone starts at a similar point (since no one has debt in the US). Subsequent debt and it's nature then starts playing on the credit score.

Originally Posted by V.Narayan

^^^^
My question is same as am1m above. I have never taken a loan since 2001 and pay my 2 credit cards on due date through auto debit. I assume this means my CIBIL score is weak or zero? Right? Why does CIBIL rate me if I have not taken a loan.

Credit cards are considered an account; so if you've been paying off the bills without any getting overdue, it is positively affecting your credit score.

[turbospooler]

Originally Posted by appuchan

Not sure how it is calculated in India. In US, not having any loan/CC indicates that he/she may not have experience in handling debt, hence possible risk and score may be low. Usually other aspects such as a income, bank balance, owned property etc does not get counted in credit score, as the name implies it is related to credit.

Originally Posted by V.Narayan

^^^^
My question is same as am1m above. I have never taken a loan since 2001 and pay my 2 credit cards on due date through auto debit. I assume this means my CIBIL score is weak or zero? Right? Why does CIBIL rate me if I have not taken a loan.

Originally Posted by libranof1987

On platforms such as PaisaBazaar that offer free CIBIL report, one of the factors listed as affecting the credit score is the no. of accounts (credit cards, loans). Income, assets are not debt, so they don't get counted towards your score. My guess is you'll have some default score.

Credit cards are considered an account; so if you've been paying off the bills without any getting overdue, it is positively affecting your credit score.

I have access to my CIBIL score free of charge (if you consider the AADHAAR, PAN and Phone number privacy as worthless), thanks to Paisabazaar. (beware of telemarketers trying to sell you cards).

Below is the screenshot of the weightage used by them:



As you can see, there are 4 factors here:
1) Timely payments
2) How much % of the credit limit you utilize, if you utilize close to your approved limit, you are considered a risk as you are trying to make most of it but may lack the resources to pay the "loan" off.
3) Which is the oldest loan (including credit card) account which determines if you have been availing a loan, you are used to it and understand it and pose a lower risk. Don't close your oldest card even if you feel it is worthless. (7+ years is green)
4) Total number of account (6+ is green): Now this is a tricky one, if your number of accounts is high, then lenders trust you with more loans and hence you are trust worthy.

Hope this helps in determining your credit rating.

[Guna]

Originally Posted by turbospooler

As you can see, there are 4 factors here:
1) Timely payments
2) How much % of the credit limit you utilize, if you utilize close to your approved limit, you are considered a risk as you are trying to make most of it but may lack the resources to pay the "loan" off.
3) Which is the oldest loan (including credit card) account which determines if you have been availing a loan, you are used to it and understand it and pose a lower risk. Don't close your oldest card even if you feel it is worthless. (7+ years is green)
4) Total number of account (6+ is green): Now this is a tricky one, if your number of accounts is high, then lenders trust you with more loans and hence you are trust worthy.
.

There are few more. I am not sure why it is not showing those for you
5) Enquiries - More enquires are not good
6) Negative accounts - Obviously any 'settled' or 'written off' credit will have negative impact.

[Santoshbhat]

Originally Posted by V.Narayan

^^^^
My question is same as am1m above. I have never taken a loan since 2001 and pay my 2 credit cards on due date through auto debit. I assume this means my CIBIL score is weak or zero? Right? Why does CIBIL rate me if I have not taken a loan.

They say that in order to build up a good CIBIL score it is advisable to take a small loan even if you don't need one. I don't know how much weightage is given to the size of the loan, but no loan means no score.

Credit card outstanding is treated as a loan. So if you pay on time and have no defaults, it adds points to your score. Higher the number of credit cards, the more they add to your score.

Irony is, a person who has managed his finances very well and never taken a loan in his life will not have a CIBIL score (or a low one, not sure).

CIBIL score basically is a reflection of your loan repayment habits. If you have never taken a loan, how can the lender know what kind of a repayer you are?

[am1m]

Originally Posted by Santoshbhat

Irony is, a person who has managed his finances very well and never taken a loan in his life will not have a CIBIL score (or a low one, not sure).

Well, I don't think I've managed my finances well, but thanks to the grace of fate and of my mom who built a house in Bangalore when it was still affordable, I've never needed to take a loan. I don't use credit cards either.

I'm very old school, I believe loans should be taken out only for appreciating assets (home, higher education, starting a business, etc.), so I've always bought vehicles I could afford in full after saving up over years, and we usually hang on to them for a bit before changing. And the thought of doing something like taking a personal loan for a foreign holiday or a superbike makes me scared!

Thanks all for the replies to my query! So the practical question now would be, what is the effect of a low CIBIL score on one's financial future? I guess not being eligible for a loan later in life would be one. Though i can't see myself needing one (no kids, no plans to have any, maybe a higher education degree for myself someday- low probability), but I guess one can never say.