Future Roles of CIBIL Credit Scores and Reports:
So far the CIBIL Reports or Credit Reports were used by lending Bankers and Financial Institutions to sanction loans to individuals, firms, and companies but now the CIBIL Reports, Credit Reports, CIBIL Scores and Credit Scores have become the most important tools to check the Credit Health of any Individual, Company or Firm not only by Banks and Lending Institutions but also for Matrimonial Purposes, VISA purposes, New Business Relations and Property Dealings.
Present Use of CIBIL Reports by Banks:
Presently almost all the leading Banks and Lending Finance Companies are using the CIBIL Reports and CIBIL Scores to know the following about their prospective borrowers:
- Credit Health Score of the borrower which can be in the range 300-900. Generally, a score above 700 or score of 750 is considered to be Good Score to make the borrower eligible for a loan.
- Full Personal Information about the borrower is also revealed by the CIBIL Credit Report, which may include Name, Address, Date of Birth, Date of Corporation in case of Company Credit Report, PAN, Voter Number, Aadhar Number, Passport Number, Driving License etc. In case of any mismatch with the particulars submitted by the applicant borrower, the Bank is put on Alert to ask more questions from the applicant borrower.
- The CIBIL Report reveals all about previous and present physical and email addresses of the borrower along with Mobile Numbers and/or Landline Number.
- The CIBIL Report reveals about all the loan account of the applicant borrower along with the status of the account which may be Active, Closed, Settled, Written Off, Partially Written Off. The Account Information is used by prudent Bankers to draw an inference about the financial repaying capacity, net worth, honesty and integrity of the applicant borrower. Only an expert like CIBIL Consultants can make an in-depth analysis of the Account Information in CIBIL Credit Reports suggesting not only the lending bankers to safeguard their interests but also advise the prospective borrowers to get rid of unwanted Strangers’ Account from CIBIL Report so that they improve their Credit Health Score to get fresh loans.
Future Use of CIBIL Credit Reports and Credit Scores
The author of this article is a retired banker and renowned CIBIL Consultant. He is continuously researching the subject of the possible use of CIBIL Credit Reports and Scores. Based on his research and findings the CIBIL Credit Reports and Credit Scores can be, rather will be used by and for the following purposes.
Matrimonial Sites for Matrimonial Purposes:
Gone are the days when the marriages were arranged through trusted mediators who used to be familiar with the social status and financial health of the families of the would-be brides and bridegrooms. Now marriages are either love marriages or marriages through matrimonial sites who provide verified profiles of not only the bride’s, bridegrooms and their respective families but they also informed about the financial health of the families through Credit Health Score and Reports systems. The Matrimonial Profiles with good Credit Scores have better chances of getting marriage alliances.
Employers check the Credit Health of Prospective Employees
Only recently I was visited by a young qualified person who got selected in a reputed bank for the post of a Manager through the selection process and interview. But the recruiting bank refused to issue joining letter to the selected candidate merely on the ground that his CIBIL Report was not in good health. I investigated his CIBIL Report minutely and found that it was none of his mistakes and it was a mistake on the part of a big nationalized Bank who issued Credit Card in his name but could not produce the evidence of delivering the Credit Card to him along with first time secured PIN to activate the Credit Card. The Credit Card fell into wrong hands within the issuing bank and was misused resulting in poor Credit Health Score in his Credit Report. It took me 3-4 months time to get the issue resolved and get the wrong reportings in CIBIL Report suppressed. Even the Bank people do not know how to suppress the wrong reporting in the Credit Reports of their clients.
Good Credit Report for VISA Purpose
More and more Indians are going abroad in search of green postures or for study purposes. Many European countries have a pre-requisite of Good Credit Report before issuing VISA for Study, Immigration, PR or Employment. It is better to check the CIBIL Score well in time regularly so that the prospective candidates do not find themselves in a pitiable situation after making huge expenditure on procuring VISAs. The word of caution, never asks your banker to draw a Free CIBIL Report for you as everytime your banker fetches your Credit Report you are bound to lose a few Credit Scores. Purchase the CIBIL Report yourself online or through CIBIL Consultants.
Property Dealings – Sale or Purchase
In property dealings, there are an important quote “Purchasers to be Extra Alert”. During my more than 35 years journey in Banking Industry and while working as Senior Internal Auditor in a Top PSU Bank in India, I came across many cases where the same borrower had mortgaged the same property with different Banks bu submitting faked/colored copies of the title deeds. Now if you are purchasing any property than before risking your hard earned money, it is always advisable to not only check the records of CERSAI but also check the CIBIL Reports which can provide you some clue about the mortgaged properties of the seller before you strike a deal with the seller.
Utility of Credit Health Reports in New Business Relations:
- Now Mobile Network Provider companies like Vodafone, Airtel have started checking the CIBIL Report as Positive or Negative for grant of New Post Paid Connection and to set up their Credit Limits.
- While entering into Financial and/or Performance contracts, the Business Houses are relying upon Individual or Company Credit Reports in India.
- Government Departments in India are not awarding e-Tenders to Individuals, firms or companies with tainted Credit Reports and Poor Credit Scores.
The day is not far away when even small retailers will be able to view the Credit Rating of their Customers before allowing them Credit on EMI basis through Aadhar Based Biometric Authentication. It will be very difficult for anyone to cheat others in Digital India of my Dreams.
Banks can use Reverse Tool of CIBIL Reports to make Recovery in Written Off Loans
- Every Bank should undertake fresh feeding and reporting of data about their written off and settled loan accounts to CIBIL Transunion about the Individual Borrowers, Guarantors, Partners of Firms, Promoter of Companies, Legal Heirs of Deceased Borrowers, Guarantors, Partners, Proprietors, and Guarantors.
- After feeding and reporting of data to the CIBIL TransUnion, the Banks Should draw fresh CIBIL Reports of all such borrowers to cross-check and confirm that their loan accounts are duly reported in their latest CIBIL Reports.
- If any borrower has taken a loan from any other bank, the Bank can share the data with the existing reported lender of the Borrower to recover its own dues.
- From the fetched CIBIL Reports of such borrowers with “Written off”, “Settled”, “Suit Filed” or “Decreed” loan accounts – the bank will come to know the present addresses, contact numbers, mobile numbers and ID Proofs of such borrowers.
- Banks should send SMSes, Emails, and Offers by Registered Letters to such borrowers to avail One Life Time Opportunity to get rid of such loan accounts with or without CIBIL Clearance.
- I am sure that Banks will be able to recover the huge amount which will be 100% net addition to their Net Profits. This author is available for more consultancy on “How to Recover Bad Loans“.