- HOW IT WORKS?
- Credit Score & Report
- Credit Bureaus
Standard Chartered Bank, just like most upscale banks, uses a Credit Score as an indicator of your credit worthiness, i.e. your ability to pay back the money you may borrow from a lender.
It helps banks in weeding out bad credit. It helps you, when you attain a high rating, to get easy access to offers, loans, and products.
Any of the four Indian agencies as licensed by RBI, namely CIBIL, Experian, Highmark and Equifax may determine your Credit Score. However, Credit Information Bureau India Limited or CIBIL is the most popular and the widely used one in our country.
Now, that we have successfully introduced you to the summarised idea of credit rating, let’s get you acquainted to the whole equation.
What Is a Credit Score?
A Credit Score, expressed as a number, helps a lender determine whether you qualify for a loan or not. It also helps them evaluate any potential risks that may come up by lending money to you.
If your Credit Score indicates that it’s unlikely that you will be able to repay a particular loan, for example, then the lender will rethink the idea of lending money to you.
It helps us work out the amount, interest rates, & credit limits that will be comfortable enough for you to pay back.
Who Calculates Credit Scores?
A Credit Information Company (CIC) handles the process of rating your credit-worthiness.
It collects data from the consumer (i.e. you) as well as from the lenders, arranges it, and comes up with a report containing details about your credit history and probabilities of your future behaviour.
Reserve Bank of India has authorised four Indian CICs. These include CIBIL, Highmark, Experian, and Equifax. Each of the four Credit Score computing bureaus uses different ranges for their rating.
- CIBIL -> 300-900
- Equifax -> 280-850
- Experian -> 360-840
- Highmark -> 300-850.
What Is the Preferred CIBIL Score for Standard Chartered Bank?
Most of the well-off banking institutions and digital finance organisations, including Standard Chartered Bank, use CIBIL’s premier services.
CIBIL offers us a full credit report on our consumers within seven days while ensuring maximum security and confidentiality. This rating greatly inspires the financing options we offer to you and helps us work out the credit decisions related to you.
While we readily accept applications with good ratings, we consider the entire report and not just the score.
What Do We Mean by a Good CIBIL Credit Rating?
A CIBIL score ranges from 300 to 900. 300, the lowest possible rating, indicates little confidence in the borrower’s money-returning capabilities.
If your score lies between 750 and 900, we will consider you a credit- healthy customer and thus a good investment. Your loans will get approved quickly with us as well as any other financing company.
With a first-rate CIBIL grade, we will offer you several benefits. These include higher loan amounts, quick approval, low interest, a longer period of repayment, etc.
Does a High CIBIL Grade Means Confirmed Credit Card or Loan Approval?
No, it does not.
A good CIBIL score (greater than 750) means that you have a blooming credit health. In most scenarios, this hints that either you pay your loan dues timely, or have a low debt-to-income ratio, or have an even number of unsecured and secured loans.
However, we consider many factors simultaneously while approving your loan, especially if your applied amount is substantial.
The gap between what you earn and what you spend, the frequency and behaviour of your repayment habits, the total amount of debt you carry at present, and such other aspects are crucial.
How Does CIBIL Calculate Credit Scores?
If you have applied for a CIBIL Credit Score analysis, you may want to keep the following criteria in mind.
- Repayment History
The frequency and tendency of paying past loans (especially before the due date expires) are vital. It affects 35 per cent of your score.
- Credit Balance
The total amount you owe to a lender is called a credit balance. It makes up 30 percent of your CIBIL score. You are a risky candidate if you cross the limits on your card or owe too much too often.
- Credit Duration
Another 15 per cent of your CIBIL grade considers the time for which you have had the loan and the number of payments you have made to the lender. It also looks at the total number of times you successfully paid back a loan before the due date got up.
- Number of Outstanding Applications
At any given point of time, the total number of credit applications you have submitted and thus the subsequent inquiry on your financial status by different lenders contribute to 10 percent of your credit score.
- Types of Credit
An excellent rating is also determined by the combination of services you choose. Having a right mix of secured and unsecured loans (mortgage, credit cards, car or personal loans, etc.) impacts your score positively. It also accounts for 10 per cent of the total rating.
What Is the Credit Score of a Person Who Has Never Owned a Credit Card or Taken Any Loan?
CIBIL uses “NH” (No History) to mark the profile of a first timer.
The NH status may pose a problem when you are looking for an unsecured loan (one that needs no collateral guarantee.)
Will Standard Chartered Bank Sanction Your Loan If You Are an “NH” Scorer?
At Standard Chartered, credit card or loan applications submitted by people with no history of borrowing are considered differently.
Since we can’t look at your past records for assurance (given that you don’t have one), we look at your income and the stability of your employment to understand your status as a credit worthy person.
You can help your circumstances by getting a secure credit card. It can be availed against a fixed amount. If you pay your bills on time, it will build and enhance your credit health. However, try not to apply for too many loans or cards in a small period.
Can You Compute Your CIBIL Score without Involving a Bank?
When you apply for any financial service at Standard Chartered Bank, we will perform a CIBIL analysis for you before committing to anything.
However, if you don’t want to involve our banking system, you can avail the online calculation services on the official CIBIL website.
You will have to fill an online request form. There will be a fee of Rs. 550, Rs. 800, and Rs. 1200 for generating a CIBIL score plus report card for one-time, bi-annually, or once-in-a-quarter respectively. Within the next 24 hours, you will get the report via e-mail.
The report card will contain details and analysis records of your credit files, payment behaviour, outstanding loan amounts, the level of utilisation of a credit card(s), monthly income, monetary conduct, etc.
CIBIL does not offer any free rating services. However, you may use the CreditSeva calculator if you don’t want to use CIBIL’s.
What Happens If Your Credit Score Is Very Poor?
Once you know how high or low you are on the scale (after using CIBIL’s online calculator), your score can be improved via several practices. However, it is important to ensure that the fault is in your history and there are no inconsistencies in the report.
If there doesn’t seem to be any errors in the credit report, work on improving the weaker sections as stated in the report.
How Can You Improve Your CIBIL Rating?
- Pay any amount you owe on time.
- While your score is low, try not to exceed the 50 per cent mark on your credit limit.
- Restrict your credit accounts to a bare minimum. Close all inactive ones.
- Don’t apply for new loans or cards unless you desperately need one.
- Don’t re-apply for any new loans if you have already been rejected recently.
- If you act as a guarantor for another person’s loan, make sure that the borrower pays on time. Any delay in their payment can ruin your rating as well.
- Improve your repayment habits by returning the instalment in full instead of paying back the minimal requirement.
It may be a few months or a little over a year before your profile gets a boost.
What Data Does a CIBIL Credit Information Report Contain?
The information for a CIR is collected from banks and other financial agencies.
|Personal Information||· Name
· birth date and year
· identification serial numbers like PAN, Passport, etc.
|Employment Information||· Occupation
· income in a month and a
· different year types of accounts in your name etc.
|Account Information||· bank accounts
· outstanding loan amount
· due dates
· current balances
· lender details
· the various types of credits (home loan, personal loan, vehicle loan, etc.)
· month-wise record of the payments made in the past three years
· data about specific enquiries made by different banks about your CIR.
|Credit Score||indicated at the top of the report|
Can CIBIL Make Mistakes While Rating Your Credit Score?
Yes, it can.
Three sections contain the most common inconsistencies in a CIBIL record.
- Personal information section
- Account details section
- The section was mentioning the number of bank enquiries against you.
We, just like other registered Indian banks, report to credit agencies whenever you ask for a loan, apply for credit, or are in touch with any service that involves a lender. CIBIL and other such institutions use this information about your financing behaviour to rate you.
If a bank fails to mention the complete payment of a loan, the absence of any outstanding credit, or the details about enquiries regarding your Credit Information Report to CIBIL, it is possible for your current report to be flawed.
How Can You Ask for a Rectified/Re-evaluated Report from CIBIL?
If your CIR is inconsistent or wrong, you can file an online dispute with the agency to demand correction.
The CIBIL CIR contains a control number visible on the top right corner. You can use it to file the complaint.
While you cannot register more than one dispute at a time, you can demand correction in multiple fields of the same report in one dispute.
CIBIL will perform an internal verification. It will also contact all the concerned banking institutions to recheck your data before updating the same in your records. The process may take anywhere within thirty days to finish.
Does CIBIL Maintain a Defaulter List?
While CIBIL has no defaulter list and its grading aren’t set in stone, you must take precautions to improve yours.
With a poor credit grade, you will encounter problems in receiving loans or credit cards, etc. The more you apply, the more you will get rejected due to a bad rating. It will further negatively impact your credit health.
If your credit grade is poor, device strategies (as suggested earlier) to increase your rating.
What Can You Do to Ensure Approval of Your Credit Request at Standard Chartered Bank?
Our credit decisions are inspired by the agency defined minimum CIBIL Scores. For Standard Chartered credit card applications to be approved, your credit history must be in good health.
To ensure the same, you must be pro-active. Apply on CIBIL’s website (or use CreditSeva services) and find out your Credit Score. If it is below 750, strategize actions to improve it. If your rating is above 750, find out what benefits you are eligible to avail.
Keep an eye on your rating by getting regular reports, at least twice a year. Manage your Credit Score accordingly.
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