What is a credit information report?
The terminology plays an important part while opting for home loans by the customer. There are various facts that the customer should know before applying for the loans. Not knowing the terminology can lead to confusion for the client and also can lead to misunderstanding by the customer. Also, there are some misleading clauses that the customer may not be aware of, and thus the customer will not come to know about getting cheated at a particular stage. There is a lack of unawareness amongst the home loan borrowers in case of financing. Even it may happen that some borrowers may not be well educated or else may not belong to finance background, which can be the reason for not knowing the terminology. The borrower should also know some other essential things like the loan’s interest rates are calculated on a cumulative basis and not on the simple interest rates. The loans can be provided for a moratorium of up to 30 years, and in any case of default or delay in payments, the borrowers may be charged a heavy penalty by the lenders. Thus it is necessary to follow guidelines as stated by the bank to avoid penalties.
The home loan terminology can help easy & clear understanding of the home loan. The loan borrowers can avail of the loans from any of the lenders of their choice, and thus all the lenders have the same terminology as applicable for the home loans. The home loan borrower has to submit the property documents to the lender while availing loans and get it returned after repayment of loans and the interest and principal amount. A better & clear understanding of the home loans can help the borrower understand the terms & conditions in a better way. The home loan interests vary according to the lender to lender, and thus the loan applicant should do a thorough survey of the loan’s interest rates before opting for the loans. The terms mentioned in the clause agreement should be analyzed carefully, and accordingly, the decision of the loan should be taken by the applicant. If the words are found to be misleading, the conditions should be changed if it’s found to be totally against the lender’s interest.
Information about credit information report
A credit information report is a report in which the credit history of the borrower is being saved for the future reference of the lenders. The credit history includes the loans taken by an individual and also the credit cards being taken by an individual and the payment history of the borrower. The borrower if repays the loans on time and also the credit card bills on time then, in that case, the borrower’s credit history is mentioned positively on the credit note. And if the borrower does not pay the credit card bill on time or the home loan EMI then in that case the borrower’s credit history is mentioned negatively in the credit report. Also, the type of mixed credits being taken and the number of loans, and the number of credit cards being taken are mentioned in the credit history. The loans frequency of payments and also delay in payment are mentioned in the credit history. The active credits are going on and also the repayment of the credit history is being mentioned in the report. Also if the borrower maintains a hefty bank balance in the bank account then in that case the impact is being put positive on the credit score of the borrower. If the borrower does not maintain a sufficient bank balance then in that case the borrower’s credit score may harm the credit score. Also, optimum utilization of the credit score is necessary. If there is very low use of credit then, in that case, there is no significant impact on the CIBIL score while if the borrower makes optimum use of credit then that case the impact is positive. In case if the borrower makes excessive use of credit cards and loans EMI then in that case if the borrower’s credit ratings may get affected as the bank may feel it risky that whether the borrower would be able to pay the loans on time or not.
The CIBIL score which is being maintained by the CRISIL Company is the score that helps the creditors take decisions related to the extension of the loans and also providing the credit cards. The CIBIL score has helped many of the lenders avoid extending the credits to the borrowers who may default on the loans. While as for the honest payers of credit are the ones who can easily receive loans from any of the banks or an NBFC.