CIBIL is India's first credit information company that maintains a centralized information repository on consumers and businesses regarding their credit history, as shared by its member banks and financial institutions.
CIBIL's member institutions regularly send updated credit details of their customers to CIBIL.
This contains, but is not limited to, Credit Card spending and payments, loan amounts and payments, mortgage loan amount and payments and other credit borrowings from all member institutions. Member banks submit this information in a regular manner.
CIBIL uses these details to create a credit information report for each customer.
CIBIL also gives a credit score, based on the credit information report.
When you apply for credit – say, a new loan or a Credit Card, the member institutions request CIBIL for details of your credit information report.
Based on your credit information report & credit score from CIBIL they decide on whether to offer the product, the amount of loan & interest rate to offer to you.
The credit history & repayment behaviour of a customer is translated into a number developed by CIBIL, called 'credit score'.
It is an indicator of the credit-worthiness of a customer. It predicts the likelihood of a consumer defaulting on a payment. A borrower who is more financially disciplined will have a higher credit score. Higher credit scores are better.