Credit Card Application rejected due to CIBIL Score

Has your Credit Card Application been rejected due to low or bad CIBIL score?

Dont't worry. You are not alone to be experiencing this. In fact most banks in India have confirmed that one of the major reject reasons for applicants seeking a Credit Card is low or no Credit Score (CIBIL Score).

If your Credit card or loan application has ever been rejected, share your experience with us here.

 

Credit bureaus in India

Credit Bureaus in IndiaIndia is home to multiple credit bureaus including CIBIL, Equifax.

Advantages of having multiple credit bureaus in a country

A recent RBI directive has ensured that every bank in the country will have to submit the consumer data to all the 4 bureaus. While this may sound like an increased overhead at the bank's end, it is interesting to also understand why the regulator would have insisted on doing so. While each bureau has its own black-box model for building their scores, the fact that there are 4 different scoring models will definitely help in building confidence at the lenders end.

Banks can now avoid both types of errors i.e. classifying bad loan seekers as good and classifying good loan seekers as bad. If a majority of bureaus have the same classification for the consumer, the bank's staff can be assured that the chances of a wrong decision due to a poor model are low.

CIBIL report – What does it contain?

CIBIL is a Credit Bureau authorized to operate in India. It was the first credit bureau and as a result now CIBIL report is a term used generically for all bureau reports in India.

CIBIL ReportCIBIL collates the information submitted by banks and other lenders and generates the CIBIL report. CIBIL is allowed to share your CIBIL report with banks when you seek new loans or with banks who have given you a loan already.

You can also get a copy of your CIBIL report directly.

If you were to get a copy of your CIBIL report then it will contain the following details:

  • CIBIL Score provides information on your score as well as tell you the % of loans sanctioned in last 1 year for borrowers whose CIBIL score equal or more than your score.
  • Personal Information –
    • Name
    • Date of Birth
    • Gender
    • ID document details like PAN / Voters ID / Aadhar / Passport etc.
    • Contact details – only latest 4 addresses and email ID are shown in the report
    • Address – residence and office
    • Telephone numbers – residence / office / mobile
    • Email
  • Employment information – details related to occupation and income are available
  • Loan / card
    • Account details
    • Name of the Bank / Lender from which the loan is availed
    • Loan start date
    • Original loan amount
    • Loan amount outstanding
    • Repayment history for upto 36 months – this information is available with CIBIL for every month since you started the loan, though only latest 36 months details are displayed
    • If loan is closed / paid off
    • Whether the loan was settled or written off- you could not pay the dues or if you asked the bank for a rebate If the loan is in your name only or is jointly taken Information about guarantees that you may given for someone else's loan are also shown in your report
  • Enquiry information

Unlike developed nations the credit bureaus in India do not have information about utilities like phone, electricity etc., and insurance payments. Currently CIBIL only has the information provided by banks.

This is the situation right now, but over time even this information is expected to become part of the data available with the credit bureaus. This report is like a financial report card for an individual. It has very sensitive information and is a private document that needs to be guarded closely.

Where does CIBIL get my data ?

CIBIL DataCIBIL or other credit bureaus are repository of information, where by they store and disseminate information about credit behaviour of borrowers.

While they may seem like God to know a lot about you (just take a look at what all your CIBIL report contains) and affecting you in your financial matters, the information contained in the bureaus is all based on data submitted by banks and other such institutions.

Every month or even more frequently banks submit information about your loans to CIBIL and other credit bureaus. In this data submission not only details of your loans like timely repayment and amount outstanding are shared but information about address, phone numbers etc also shared. Apart from this when you apply for a new loan then the bank enquiries about you with the bureau to find out your details.

At that time the information submitted to the bureau like name, DOB, address and phone numbers along with loan type (Personal loan, credit card etc.) and amount of the loan you applied for are also saved by the bureau and updated to your profile.

What is a Credit Bureau?

Have you heard of Credit Bureau and wonder what is a Credit Bureau? If yes, read on. In the next 7 mins you will know all you need to, about Credit Bureaus.

Credit Bureau in IndiaLenders (both formal and informal) have since times immemorial understood the importance of borrower behaviour (on old and existing loans) in evaluating new loan applications. Even your parents gave you relaxation in rules based on whether you honoured your previous promise.

There were mechanisms of informal sharing of information about the borrower between the lenders – bilateral or multilateral exchange of customer behaviour information. There were rudimentary formal mechanisms like Mastercard Negative File also in use.

The challenges with these informal data sharing were manifold:

  • Limited information about the customer was shared mainly default information and that too severe and continuing defaults only were shared.
  • Information sharing was totally voluntary
  • Did not ensure level playing field for all lenders especially those who could not participate in bilateral / multilateral agreements
  • Information was usually updated only once when the default happened, there was no follow-up data sharing about the customer's default
  • No information shared about the overall debt that the customer has availed

With the expected increase in lending to retail customers, increasing importance of bank lending to the economy and the stress seen in the bank's loan portfolios in late 1990s, it was realised that there needs to be a formal mechanism to share borrower behaviour between lenders.

CIBIL is the name of the first credit bureau set up in India. It stands for Credit Information Bureau of India Limited. CIBIL was set up in the year 2000, though its adoption and growth started in real earnest once the CICRA came into force.

Credit Bureaus in India are credit information companies whose objective is to collate information about borrower behaviour and share it amongst lenders like banks, NBFCs etc. Credit information companies are governed by CICRA (Credit Information Companies (Regulation) Act) which was passed in June 2005. RBI issued the regulations under this act in Dec 2006. As a result of the enabling provisions of CICRA, more licenses have been granted to set up credit bureaus.

Apart from CIBIL, there are 3 more credit bureaus active in India – Equifax, Experian and CRIF-High Mark

Secured Credit Cards in India

Secured Credit Card = Fixed Deposit + Credit Card

Secured Credit CardsA secured Credit Card in India is a combo product where in an applicant opens up a fixed deposit with the bank and is then issued a credit card from the same bank.

Secured Credit Cards India

Secured Credit Cards are a unique product which allow banks to issue an unsecured line of credit to an otherwise High credit-risk applicant. Secured credit cards are issued by ICICI bank, Axis Bank, DCB Bank amongst others in India.

If you have a poor Credit score or no CIBIL score, FinTiger can help you improve your score, by getting you a Secured Credit card from one of its partner banks. Join / Learn more about our program here.

The minimum fixed deposit required for the Secured card and the percentage multiplier used for deciding the credit card limit is something that varies from bank to bank.. Please make sure to choose the best option that works best for you.

Cholamandalam MS General Insurance India – policy, updates

About Cholamandalam MS General Insurance

Cholamandalam MS General Insurance Company Ltd. was founded in the year 2001. Through a 74:26 joint venture between INR 225 billion Murugappa Group and Japan’s Mitsui Sumitomo Insurance Group Cholamandalam MS General Insurance Company was born.

Based out of Chennai the Company has more than 2500 employees and is headed by S. S. Gopalarathnan who is the Chief Executive Officer.  The company is also the first private insurer to receive the ISO 9001:2008 certification for its motor claims department.

The company posted a gross written premium of Rs1346 crores in the year 2011-12. The company showed a growth of 39% over the previous year.  Having a network of over 90 branches and a strong agent base of 7000 the company is one of the fastest growing in the industry. Company has tied up with a number of leading banks, auto companies to sell its products.

The company offers general insurance products in the areas of Travel, Health, Motor and Home. For Small and Medium Enterprises the company offers Risk Consulting Services in Marine, Property, Engineering, etc.

To reduce turnaround time in claims processing the company introduced Mobile Computing Technology. Other advantages of the technology include improved fraud prevention and increased productivity.


Products from Cholamandalam MS General Insurance

Bank of the Philippine Islands (BPI) – Products, branches, updates

About Bank of the Philippine Islands (BPI)

Bank of the Philippine Islands often known as the BPI is the oldest commercial bank with an expanded banking license. It was established on August 1, 1851 to offer financial services to customers, multinational corporations, government organisations and many other small and medium sized enterprises. It is the first bank to be established in Philippines and since then the bank has been continuously operating country’s banking and finance industry. The bank has been the only domestic commercial bank in the region even after so many years of its inception.

The bank offers a wide range of banking products and financial services and has employed thousands of people for Philippines Business in 831branches throughout the nation. The bank is always in perfect competition with the major banks such as Philippine National Bank, BPI, Banco de Oro and Metrobank. The bank has been honoured the position of the 2nd largest bank in terms of assets and country’s largest bank if its market capitalisation is taken into account.

The country’s most profitable bank is owned by the Ayala Corporation – the largest conglomerate in the Philippines. The bank is also claimed to be the first Philippine Bank that offers insurance products and services. The few subsidiary companies or affiliates of Bank located in Philippines are as follows:

  • BPI-Philam Life Insurance Corp.
  • BPI Operations Mgt. Corp.
  • BPI/MS Insurance Corp.
  • BPI Capital Corp.
  • BPI Forex Corp.

Surely, Bank serves millions of customers and always feel happy and delightful to have had influence in their prosperity and always thankful to them for their unflinching trust and support. The bank always looks forward to new banking relations and assures businesses, families and individuals for more and more support. Bank of Philippines does not compete with two banking partners namely BPI Family Savings Bank and BPI Direct Savings Bank. Rather they offer a helping hand of services to each other as per the situation.


Products from Bank of the Philippine Islands (BPI)

5 mantras from Chintamani

Chintamani the mascot from ICICI Prudential talks about the 5 basic rules of buying Life Insurance:

Chintamani Mantras

  • Check the number of years you need to pay premium for. Typically known as the Premium Payment Term or PPT, this could be a single premium policy where you pay just once or could be a regular pay – where one pays every year.
  • Check ALL charges applicable – e.g. Mortality charges, Premium Allocation Charges, Fund Management Charges
  • Check your Life Cover and maturity benefits
  • Enter correct details for hassle free claims
  • Pay cash only at official centres