1. Which of the following factors typically has a NEGATIVE impact on an individual's CIBIL Score?
Regular payment of credit card bills.
Having a mix of secured and unsecured loans.
High utilization of credit limit (e.g., >80%).
Checking one's own credit score frequently.
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 a very high credit score.
A customer with too many loans.
A customer who has defaulted.
A customer with very little or no credit history.
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
Experian
Standard & Poor's (S&P)
TransUnion CIBIL
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:
Positive/Healthy for the credit score.
Neutral.
Negative for the credit score.
Irrelevant.
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?
RBI Act, 1934
Banking Regulation Act, 1949
Credit Information Companies (Regulation) Act, 2005 (CICRA)
Companies Act, 2013
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?
Applying for multiple loans in a short span.
Maintaining a mix of secured (e.g., Home Loan) and unsecured (e.g., Credit Card) loans.
Closing old credit card accounts.
Making only minimum payments on credit cards.
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).