Special :: How do Banks interpret and use CIBIL report?

Saturday, May 25, 2013 by Munir Kulavoor| integrafinserve.in |

CIBIL Consumer Credit Information Report (CIR) is used in Banks for the purpose of ascertaining the loan applicant’s credit discipline. With a view to arm borrowers with an insight, we shall see how Banks treat or interpret CIBIL reports particularly in granting Home Loans. To be able to understand the explanation below we suggest you obtain your own CIBIL Report by clicking here. Following are the guidelines normally adhered to by Banks:

CIBIL Consumer Credit Information Report (CIR)

(i) CIR reports are used for assessment of the borrower’s past payment behavior and current capability to service the loan.

(ii) Among other things CIR contains repayment history of upto 36 months in each loan/ credit facility availed by the borrower from the CIBIL member institutions.

CIBIL TransUnion Score(s):

Lets consider Mr. Shah a retired public servant and currently a consultant with a private organisation was co-applicant on a home loan application. Mr. Shah had been against loans all his working years though he just had one credit card which he sparingly used only for emergency. CIR had score of 578.

(i) Score predicts the likelihood of 91+ days delinquency on one or more loans in the next twelve months. It is between 300 and 900, the higher the score, lower is the risk profile of the individual. Scores higher than 700 indicate low risk and score less than 520 indicates high risk.

(ii) Individuals who do not have any loan record in CIBIL database are assigned a default score -1 whereas a score range of 1 to 5 is assigned to the individuals with less than 6 months of credit history. The higher the score lower is the risk profile of the individual.

(iii) Though CIBL TransUnion Credit scores are presently not used for the purpose of assessment of loan application in most Banks, they may be used by credit officers for the purpose of taking credit decisions in borderline cases. Credit decisions in case of applicants with score less that 520 and score 1 and 2 (for those who have credit history less than 6 months) may be taken with due caution and recording reasons thereof.

Mr.Shah’s CIBIL report was dealt with caution. Credit officers sought explanation for low score.

CIBIL CIR Features:

Account Status:

There is field named ‘STATUS’ in CIR. “Blank” status field indicates that the outstanding balance in the account has not been written-off. If the ‘STATUS’ is not blank, it shows the status of the stressed assets when amount is overdue is written-off by the bank and/or suit is filed.

Loan applications of the borrowers whose ‘Account Status’ is not “Blank” is handled as under:

If the Account Status for a secured loan/unsecured loan/credit card is

(I) Suit Filed,

(II) Willful default,

(III) Suit Filed (willful default),

(IV) Suit filed & written-off,

(V) Willful default & written-off or

(VI) Suit filed (willful default) and written-off,

the applicant’s proposal may be rejected.

Fortunately Mr. Shah’s report did not fall in the above category of Suit Filed / Willful Default.

Decisions regarding other Account Status may be taken as under:

Account status

Credit Facility

Credit card Others
Settled => Accept Reject
Settled post write-off => Accept if single instance. Else deviation may be approved as per delegation matrix Reject
Written off => Deviation may be approved as per delegation matrix Reject
Restructured => Deviation may be approved as per delegation matrix Deviation may be approved as per delegation matrix: (a) the repayment is rescheduled and the performance is since satisfactory. (b) In cases where loans have been restructured under notifications issued by the State/Central Govt. under special circumstances.

Delegation Matrix is an authority matrix or framework created by senior management of Banks entrusting levels of management/ function with certain discretionary powers to grant approvals in cases of deviation from the norm.

A satisfactory performance of a secured loan after an incident of write-off may be considered a positive sign.

Days Past Due (DPD) / Asset Classification (upto 36 months):

Days Past Due (DPD) means the number of days lapsed after due date of making payment of bill amount/EMI. This field in the CIR shows repayment history in the borrower’s account. Latest date of reporting by the member institution/bank appears on the extreme left and thereafter the data is reported in descending order of dates, as such data in this field is to be read from left to right as shown below:

180 XXX SUB Number of DPD / Asset Classification
08-07 07-07 06-07 Reporting date (mm-yy)

Even if ‘Status’ of the account is “blank”, for the purpose of loan assessment in the Bank, the account will be classified as “an account in default” if one or more of the following conditions :

(i) Present DPD is more than 30 days

(ii) DPD 60 days or more on more than one occasion during last 12 months,

(iii) Asset classification as ‘SUB” (Substandard), “DBT (Doubtful), “LSS” (Loss), or “SMA” (Special Mention Account).

Overdues seen in the CIBIL Report would be dealt with as below:

Mr. Shah’s CIBIL Report showed written-off & overdues amount of Rs.931/- & Rs.235/- respectively on one additional credit card, which is more than 08 years old (03/12/2005). He claimed he never used any credit card in his lifetime & has no record of such account appearing in CIBIL Report.

Overdues Treatment
One overdue monthly payment in 24M Allowed if DPD not exceeded 30days in last 6M
Single credit card default more than 5yrs old irrespective of amount Allowed if no other instance of overdues & credit discipline is demonstrated in other loans
Overdue upto Rs.10000/- Deviation may be approved as per delegation matrix provided approving authority is satisfied with borrower’s claims of wrong billing if any & that borrowers has not willfully defaulted.
Overdue above Rs.10000/- Deviation may be approved as by senior management based on justifications on record.

In Mr. Shah’s case, the sourcing team obtained the approval of the Credit Manager as per the internal Delegation Matrix of the Bank based on justification given by him in writing.


CIBIL report provides information real time. Therefore “Enquiries” section of the report comes handy for ascertaining the number of lenders with whom the borrower is talking about different credit facilities. Extra precaution may be exercised in cases where more than 2 enquiries of the same product and same amount are observed within a space of last 1 month. In such cases one more report may be pulled out prior to disbursement and status of those enquiries may be ascertained from the borrower.

So far Banks have been relying on services of CIBIL to access credit history of the borrowers. Recently RBI has granted Certificate of Registration to 3 other Credit Information Companies (CIC) namely:

1.Equifax Credit Information Services Pvt. Ltd. (ECISPL)
2.Experian Credit Information Company of India Ltd. (ECICIPL)
3.Highmark Credit Information Services Pvt. Ltd. (HMCISPL)

Most Banks have subscribed to the services of all four CIC’s.

To ensure consistency and authenticity of the credit information from reports from multiple credit bureaus it is advisable and to properly use it as a risk mitigating tool, credit officers may use the matrix as under (proposed in most Banks):

Home loans upto Rs.10lacs Report from one credit bureau.
Home loans above Rs.10lacs Report from two credit bureau.

However to arrive at credit decisions, Banks continue to rely on services of CIBIL untill the others are integrated into Bank systems.

Multiple Deviations:

For multiple deviations in single proposal, the case has to be recommended and presented to Corporate Office (CO)/ Senior Management for approval from the Head of sourcing team. Cases with only those deviations that are beyond the discretionary powers of the Zonal/Regional/Circle authorities, may reach CO level.


The above article is derived from over 15 years experience of the author (founder of Integra FinServe) within the banking industry and in dealing with various financial institutions to facilitate loan applications of clients of Integra FinServe. Any resemblance of the contents of the above article with internal processes of financial institutions may be treated as purely coincidental as such. 

Integra FinServe provides consultation for improvement in credit scores and subsequently help you obtain Home Loans or Car Loans from your preferred Bank/HFC in a structured manner.

Call +919322286765 for consultation.


  1. Swamy

    Hello Sir,

    I had a credit card which I lost or misused by my friends back in 2005 and it was closed in 2008. Recently I ordered my CIBIL report which shows that this Credit card with Citibank as “WRITTEN OFF” and was last reported on Jan 2010.
    I never had any communication about this from bank. Infact I had another credit card from Citibank in 2009 and closed in 2010. I also have a savings account with them even now. None of them ever asked me about this.

    My credit score is 868 which looks better.
    Will they consider this WRITTEN OFF status for future loans?
    Infact I had a house loan in 2009 and paid off entirely in 2012. I had 2 more credit cards which are actively paid an no payments past due date.
    I also have an auto loan which I cleared in 2009.

    All that bothers me is that old data which I really dont remember. How long does this data show in CIBIL report. I thought it was 7 years. Please let me know.

    Now, my question is will this status be a problem in getting future loans?
    How should I get this fixed? will it affect even if I settle the amount with them?

    Please let me know.

    • munirkulavoor

      Hi Swamy,
      If the dates you have mentioned here are correct & the amount written off is within say Rs.10000, you should not face any problem securing fresh credit/loan from Banks. CIBIL does not wipe off credit records on the basis of vintage of the loan or card account. However as a responsible borrower you must make inquiries with the card issuer concerned about the card account appearing on your credit information report. Try to close the account and seek confirmation from them, having updated the same on CIBIL or other credit information bureau records.
      Moreover the fact that you have availed and closed two secured loans (auto loan & home loan in 2009) is good enough for any Bank to conclude that you are a credit worthy borrower. Please call +919322286765 for further clarification, if any.

      • Swamy

        Thanks for your response Mr Munir. I did contact the bank and they have offered me a full and final payment option.
        They gave me a letter for payment and they mentioned the following in it.

        “Accordingly, We offer (“offer”) you to make a full and payment of Rs. 11654.73 in 01 installment (s)
        via cash/payment instrument payable to Citibank NA. Please mark your cheque! demand draft favoring
        your Citibank Credit Card account number.

        0n receipt and appropriation of complete payment(s) Within the prescribed timelines, the bank shall
        initiate updatiori of your credit record with CIBIL to reflect as “Null with nil dues”. Please note it may
        take up to 60 days for CIBIL to update their records with the above status. Further, there will be no
        additional changes in CIBIL records other than the status and the outstanding amount.”

        Ideally the balance with interest was 57000rs. But they went ahead with 11654 as the principal. I clearly mentioned them that CIBIL should not reflect as “SETTLED”. So they mentioned it as “NULL with nil dues”. So is it fine with CIBIL report with the above status? Please let me know so that I can pay my balance asap.


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