Credit history is a report which documents anything related to how an individual managed their financial transactions.
The Credit Information Bureau (India) Limited (CIBIL) was incorporated in 2000 by the Government of India and the Reserve Bank of India to provide credit information about commercial and consumer borrowers to a limited group of members, including banks, non banking financial companies, financial institutions, housing finance companies and credit card companies.
Credit Information Report (CIR) includes information like name, address, past payment history, record of all credits availed, any amount overdue, number of inquiries made on the borrower, legal matters regarding finance, etc. It includes information on borrowing and repayment of bank and car loan, mortgages, credit cards and any other debt owed to a creditor. An individual’s credit history will include any credit card accounts and loan applied for or closed. A credit history lists late payments and defaults on loans. Every financial transaction therefore affects the credit rating.
The CIR excludes some of the individual’s details related to income/revenue, bank deposit amounts, personal assets, assets mortgaged, investments, etc.
A good credit history enables makes availing of credit easier. Even the interest rate of loan, quantum of loan could be better because of the better the credit history.