Practicing financial prudence involves many things such as budgeting, planning for the future, and avoiding unnecessary debt. In all of this, your credit report plays a crucial part in determining your borrowing power and financial health. But, this may not always be easy, for your credit report may contain financial jargon that you may not be aware of. In this article, we will list some common terms and keywords can expect to find on your credit report and what they mean. This knowledge can help you understand your credit report more thoroughly and make informed financial decisions based on it.

  1. Amount Overdue: This is the total amount, including principal and interest, which the borrower has not repaid the lender on time.
  2. Actual Payment Amount: This indicates the amount which is different (higher or lower) from the EMI amount which the borrower has paid to the lender.
  3. Asset Classification (AC): The Reserve Bank of India has laid out the following Asset Classification norms which are used by certain banks to report Days past due or DPD: 

DPD

Denotes

Explanation

DBT

Doubtful

The account has remained sub-standard for 12 months

LSS

Loss

Ann account which has registered a loss and is uncollectible

SMA

Special Mention Account

A special account created for a standard account indicating signs of turning a sub-standard account

STD

Standard

Account for which payments are being made within 90 days.

Accounts where payment is overdue for over 90 days are classified as Non-performing Asset (NPA) by the bank.

SUB

Sub-standard

Indicates an account that has been classified as an NPA for up to 12 months.
       

 Cash Limit: This is the amount you are allowed to withdraw from your credit card, specifically.

  1. CN (Control Number): This is your credit report number which is important if you need to raise a dispute request on your credit report.
  2. Collateral:  This is the security provided by the borrower to the lender if the former is unable to repay the loan. It is typically in the form of gold, property, shares, etc.
  3. Credit Limit: Is the maximum or total amount of credit that is available to the borrower via a credit card or overdraft facility.
  4. Current Balance: This indicates the amount that you currently owe a lender for a credit facility. Once the lender receives this payment, it will take them approximately 30-45 days to update the same with CIBIL.
  5.  DPD (Days Past Due): This indicates the number of days by which a payment on a credit account has been delayed in that month. DPD appears in the ‘Account Information’ section of your credit report and can go back to 36 months of payment history. Do note that classifications besides ‘STD’ or ‘ODO’ are considered negative by lenders. If ‘XXX’ is reported for your DPD against an account, it indicates that the bank has not conveyed the information for those months to CIBIL.
  6. EMI Amount: the Equated Monthly Instalment (EMI) is the amount that you pay towards your loan(s).

When it comes to managing money, knowledge can be invaluable. Knowing these commonly occurring terms in your credit report will help you understand it better, thus allowing you to take action on it accordingly to ensure it aids your financial health.

The author is Senior Manager, BankBazaar.com. This article has been published as part of a special arrangement with BankBazaar.