1. Which of the following factors typically has a NEGATIVE impact on an individual's CIBIL Score?
Having a mix of secured and unsecured loans.
High utilization of credit limit (e.g., >80%).
Checking one's own credit score frequently.
Regular payment of credit card bills.
Explanation:
High credit utilization indicates credit hungriness and increases the risk of default, thereby lowering the score. Checking one's own score (soft inquiry) does not hurt it.
2. Which of the following is considered a "thin file" customer by Credit Information Companies?
A customer with very little or no credit history.
A customer who has defaulted.
A customer with too many loans.
A customer with a very high credit score.
Explanation:
"Thin file" refers to consumers who have insufficient credit history for the bureau to generate a reliable credit score. This makes assessing their risk difficult.
3. Which of the following is NOT a Credit Information Company (CIC) in India?
Equifax
TransUnion CIBIL
Experian
Standard & Poor's (S&P)
Explanation:
S&P is a global Credit Rating Agency (CRA). The four CICs in India are CIBIL, Equifax, Experian, and CRIF High Mark.
4. A "Credit Utilization Ratio" of 30% or less is generally considered:
Negative for the credit score.
Irrelevant.
Positive/Healthy for the credit score.
Neutral.
Explanation:
Keeping credit utilization (Balance / Limit) below 30% shows responsible credit usage and positively impacts the score. Maxing out cards (>90%) hurts the score.
5. Credit Information Companies (CICs) in India are regulated under which Act?
Banking Regulation Act, 1949
RBI Act, 1934
Companies Act, 2013
Credit Information Companies (Regulation) Act, 2005 (CICRA)
Explanation:
CICRA 2005 provides the legal framework for the registration, governance, and functions of Credit Information Companies like CIBIL.
6. Which of the following customer behaviors will IMPROVE a Credit Score?
Closing old credit card accounts.
Maintaining a mix of secured (e.g., Home Loan) and unsecured (e.g., Credit Card) loans.
Making only minimum payments on credit cards.
Applying for multiple loans in a short span.
Explanation:
A healthy "Credit Mix" (balance of secured and unsecured debt) is viewed positively by credit bureaus. Closing old accounts shortens credit history (bad), and frequent applications indicate credit hunger (bad).