Published on Dec 27, 2023Updated on Dec 28, 2023
A CIBIL score reflects an individual's creditworthiness based on their credit history. This three-digit score signifies financial reliability and can impact one's borrowing capacity.
A high CIBIL score, usually 750 or above, demonstrates responsible credit behaviour, which in turn increases the chances of loan approvals at favourable interest rates.
It directly correlates with the information in a credit report, summarizing an individual's repayment patterns, credit utilization, and overall financial responsibility. The CIBIL score serves as a quick reference point for lenders to assess the risk of extending credit, emphasizing its significance in financial transactions and loan approvals.
Credit Information Bureaus, such as CIBIL, Equifax, Experian, and TransUnion, play a crucial role in gathering and managing credit-related information for both individuals and businesses. By collaborating with financial institutions, lenders, and utility companies, these bureaus compile extensive credit reports and scores for individuals, inclusive of important data such as credit accounts, repayment patterns, outstanding debts, and credit inquiries.
The credit reports produced by these bureaus provide a thorough overview of a person's or organization's credit standing, allowing lenders to carefully evaluate the level of risk involved in offering credit or loans. Utilizing this information, credit scores are calculated to gauge the probability of repayment, ultimately impacting the approval and conditions of loans or credit cards. These bureaus play a critical role in facilitating equitable lending practices, empowering individuals to comprehend their financial status, and encouraging responsible borrowing and lending within the financial landscape.
Understanding the significance of your credit report: Your creditworthiness is summed up in a credit score, which reflects your financial trustworthiness. This score is influenced by various factors, such as past defaults, late payments, or significant debt. Prompt bill payments and responsible handling of debts can boost your score.
Seeing "STD" next to your name is actually a good thing. STD in CIBIL stands for "Standard," which indicates that you have been making timely payments without any delays. Essentially, it shows that you have a positive credit history and have been responsible with your repayments - a very favorable sign for lenders.
However, there is another abbreviation that may appear on your credit report - "LSS." This stands for "Lender Settled Status," and unfortunately, it does not have the same positive connotation as STD. LSS, meaning in CIBIL, indicates that you have settled a debt with a lender for a reduced amount after negotiating. While this may have helped you manage your debts, it is viewed negatively and could potentially harm your credit score.
DPD in CIBIL, or 'Days Past Due,' is a crucial metric in the world of credit, representing the number of days that a borrower's payment remains outstanding. This metric is further classified into distinct categories, such as DPD 30, DPD 60, DPD 90, and beyond, based on the extent of the payment delay. As a result, a borrower's credit report provides a comprehensive overview of their payment delinquency and potential risks associated with their payment behavior.
The differences between STD, LSS, and DPD are tabulated as below:
Indicates regular and timely payments.
Indicates healthy credit management.
Reflects settlement or severe delinquency stages.
Suggests a payment settlement or severe delinquency issues.
Signifies payment delays.
Points to delayed or missed payments.
You can access your CIBIL report using the following strategies:
Visit the CIBIL website (https://www.cibil.com/) or use their mobile app.
Sign in or create an account.
Pay the required fee to access your report.
It's important to keep an eye on your credit report's metrics, such as STD, LSS, and DPD, as they reveal a lot about your financial health.
By regularly monitoring these metrics, you can proactively manage your credit health. This way, you can quickly identify discrepancies or errors in these indicators and take corrective measures before they significantly impact your credit standing. Being aware of your credit report's status allows you to make informed financial decisions. It also boosts your eligibility for personal loans or credit cards with favourable terms. This emphasizes the importance of consistent monitoring to safeguard your financial well-being.
Metrics like STD, LSS, and DPD in CIBIL are essential for understanding your credit report. These metrics can significantly impact credit scores and influence loan approvals. Adopting healthy credit practices to maintain a good CIBIL score can help you secure favourable home, business, or personal loan terms with financial institutions like SMFG India Credit. Taking proactive steps to manage your credit can make all the difference.
STS, or ‘Standard’ code in a CIBIL report, is a positive indicator of timely repayments by a potential customer/borrower. Lenders will interpret this as proof of healthy credit behaviour.
A CIBIL score of 900 is considered the highest and indicates an excellent credit history. An individual with this score can avail of advantageous loan terms with potentially lower interest rates.
The LSS typically doesn’t have a marking system per se. However, the LSS is a negative note in the CIBIL report, indicating the borrower has settled a credit account with the lender for a lower amount. LSS can be detrimental to creditworthiness and may damage future loan applications.
'STD' stands for 'Standard' in CIBIL form. This is a term that appears in credit card and loan accounts. STD indicates that you paid your past-due bills on time or within 90 days of the due date.
The LSS affects credit card use by marking a settlement between you and the lender for reduced payments, impacting credit scores negatively. LSS affects credit card usage by impacting creditworthiness and potential limit reductions.
Apart from XXX or 000, the best way to remove a DPD record from your credit report is by making timely payments. Additionally, you can use strategies such as:
CIBIL scores are usually updated under the following circumstances:
Credit scores take 4-12 months to reflect positive changes in credit behavior.
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