Credit Information Bureau (India) Limited or CIBIL is a repository of records of an individual‘s payments pertaining to loans and credit cards. Banks and other lenders share the data about their customers’ loan or card due repayments, on a monthly basis, with CIBIL. This information is then used to get Credit Information and credit score pertaining to an Individual and is available to lenders to help evaluate and approve fresh loan applications. To understand more about how the CIBIL report works check out this link- https://www.cibil.com/faq/understand-your-credit-score-and-report
While CIBIL score plays an important role in deciding whether an individual can get a new loan or a credit card, its impact is now felt beyond lending decisions. Employers have started looking at credit history of prospective candidates to make hiring decisions.
There are numerous instances where poor repayment records are leading to cancellation of job offers or rejection of candidates. In case of marginal issues or minor lapses, employers make an exception and ask candidates to furnish no dues certificates from lenders, however in case of more serious lapses, the candidature is dropped.
Some of the common reasons that can cause a CIBIL report to look bad are
Non-Payment or Delayed payments of dues - these include
EMIs not paid or paid late
Cheque bouncing/ ECS debit rejection
Late payment or non-payment of credit card outstanding
Disputed cases- which include
Open cases of old dues which are under dispute
Cases of settlement of dues/penalties
High level of Debt
Multiple credit cards with high usage close to the limit
Multiple loans which may strain the repayment capacity
To avoid any negative influence of CIBIL credit report, the best way is to ensure that the borrowings are well in control and the dues are paid in time. In case of any delays or unintentional defaults, it is advisable to clear the pending dues immediately. In instances where there are lapses due to technical issues or problems at lender’s end, it is important to get the same in writing from the lender to avoid future issues.
Keep your credit history healthy to ensure it does not become an hindrance in your professional growth.