As we know that CIBIL report is one of the most important tools for a Credit Manager to assess creditworthiness, repayment discipline, risk exposure, and fraud indicators. Proper interpretation goes far beyond just checking the score so today article How to Read a CIBIL Report is very important for credit background persons
This guide explains: Step-by-step CIBIL reading process….
- Types of CIBIL reports
- Risk indicators and red flags
- Practical checklist
- Real-life case studies
Types of CIBIL Reports.
- CIBIL Consumer Credit Report :- Used for Individual borrowers, Personal loans, home loans, auto loans, credit cards, the consumer credit report contains:-
- CIBIL score (300–900)
- Personal and identification details
- Loan and credit card history
- Repayment behavior (DPD)
- Credit enquiries
Note:-Most commonly used report for retail credit decisions.
2. CIBIL Commercial Credit Report: – This type of CIBIL used for Businesses, firms, companies, MSME and corporate loans, this type of CIBIL contains:-
- Company credit rank (CMR: 1–10)
- Credit facilities & limits
- Repayment performance
- Defaults, restructuring, write-offs
Note: – Lower CMR rank = lower risk (Rank 1 is best) and higher CMR+ Higher Risk, mostly Banks and Finance companies avoid CMR 8 and above.
How Credit Managers Should Read a CIBIL Report
The first step is CIBIL score analysis in which credit manager checks the CIBIL score of borrower.
Score Ranges:-300–900
| CIBIL Score | Risk Level |
| <650 650–699 | High Risk Moderate |
| 700–749 | Good |
| 750+ | Excellent |
Important Point: Never approve or reject based only on score, before rejecting and approved go in deep to understand the actual reason.
Step 2: Personal and Identity Verification Check:- The second step is where credit manager needs to cross check personal details of borrower with CIBIL such as Name, DOB, Gender, Address, PAN Number etc. If credit manager found anything mismatch as per KYC and CIBIL he needs to pull additional CIBIL with correct details. Most important if borrower having different PAN number then credit manager needs to verify that which PAN card is linked with applicant’s Aadhar or conduct the FCU for status clearance.
Some Red Flags:
- Multiple PANs
- Frequent address changes
- Name variations (fraud risk)
Step 3: Loans Details:-In the 3rd step credit manager needs to check and loan details of all running loans like availed date, number total loans, sanction amount, outstanding amount, and EMI amount, re-payment frequency, loan types, secured and unsecured loan ownership, loan status, etc.
Step 4: Repayment History or DPD (days past due) analysis: – In the 4th step credit manager needs to analyze the DPDs so understand the DPDs think on below chart.
| Common DPD Codes | Code Meaning |
| 000 | Payment made on time |
| 001-030 | 1 to 30 days late |
| 031-060 | 31 to 60 days late |
| 061–090 | 61 to 90 days late |
| 091–120 | 91 to 120 days late |
| 121–150 | 121 to 150 days late |
| 151–180 | 151 to 180 days late |
| 180+ | Severe delinquency |
| STD | Standard (used by some lenders instead of 000) |
| SMA | Special Mention Account (early stress) |
| SUB | Sub-standard (it means account has remained overdue for more than 90 days and lender has officially classified it as NPA. |
| DBT | Doubtful |
| LSS | Loss |
CIBIL Classification via DPD.
| 0–30 DPD | Minor delay |
| 31–90 DPD | Serious delinquency |
| 90+ DPD | NPA (Non-Performing Asset) |
Step 5: Credit Enquiries (Credit Hunger Check):- Loan enquiries play a very critical role as some times borrower disbursed the loan but same not updated on his cibil in loan summary then with the help of loan enquiries we can catch the same so every credit manager need to check cibil enquiries before going on PD and need to put-up questions from the borrower regarding the recent loan enquiries.
| Enquiries | Interpretation |
| 0–2 | Normal |
| 3–5 | Medium Risk |
| 6+ | High risk |
Credit Manager’s CIBIL Analysis Checklist
Identity and Stability
☐ PAN and DOB verified
☐ Address stability checked
Score and Rank
☐ Score within policy
☐ CMR acceptable (for business)
Debt Profile
☐ Secured vs unsecured balanced
☐ No over-leveraging
Repayment Discipline
☐ No recent 30+/90+ DPD
☐ No chronic delays
Risk Flags
☐ No write-offs / settlements
☐ Enquiries within limits
Sample Case Studies;-
Case Study 1: High Score but High Risk
Score: 780
Multiple personal loans
6 enquiries in 3 months
EMI burden > 60% income
Decision: Conditional approval / reduced limit
Lesson: Score ≠ low risk
Case Study 2: Medium Score but Strong Profile
Score: 695
One home loan
Clean repayment history
Stable employment
Decision: Approval
Lesson: Behavior matters more than score
Case Study 3: Business Borrower (MSME)
CMR Rank: 7
Delays in WC loan
Over utilized limits
Decision: Reject / restructure
Lesson: CMR trend more important than turnover
Conclusion:- For a Credit Manager, a CIBIL report is a risk diagnostic tool, not just a scorecard. A holistic approach combining CIBIL, income analysis, bank statements, and business performance leads to better credit decisions and lower NPAs.