In India, banks use CIBIL, Experian, Equifax, or CRIF High Mark scores. Here, we will discuss all three credit scores.
The CIBIL, Experian, CRIF High Mark, or Equifax credit scores are all used by Indian banks to gauge the creditworthiness of borrowers. All of them are authorized by the Reserve Bank of India and regulated by the Securities and Exchange Board of India (SEBI).
Why is the Credit Score Important?
A credit score is a three-digit number that tells about your creditworthiness. Lenders always check your credit score to get an idea about the risk involved in lending you money. Credit scores are important because they -
Show how responsible you are as a borrower
Speed up the decision-making process of loan approval
Gauge the likeliness of you defaulting on a loan
Inform about your payment history
Tell about the number of active loans under your name
TransUnion CIBIL is one of the most popular credit bureaus in India. Their members include banks, financial institutions, and NBFCs - over 5,000 in number. They maintain credit information of over 1,000 million individuals and businesses.
Apart from India, TransUnion CIBIL has a presence in Africa, Latin and North America, Asia Pacific, and Europe. They are characterized by the following facts -
It was established in the year 2000
Their rating ranges from 300-900, and a rating of 700 and above is generally considered good
You can check your score for free, but the basic plan of 1 month costs Rs.550 + GST, which will include your CIBIL report as well
What is Experian Score?
Experian is a credit bureau that has supported over 3.5 billion credit decisions. It has been providing data and analytics tools for over 125 years. It is present in over 44 countries in America, Asia Pacific, Europe, and Middle East & Africa.
Suggested Reading: All You Need to Know About Experian Credit Score
Here are some important facts about them -
It was established in the year 2006, but got registered in India as a credit information company in 2010
Their scores lie between 300-900, and a score above 700 is considered good enough by most lenders
It is free for the first time, but Rs.399 + GST for continued membership
What is Equifax Score?
Headquartered in Atlanta, Equifax is a global data and analytics company that has been functioning as a credit rating bureau since 2010. It is present in 24 countries all over the world.
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Following is an overview of Equifax -
The company was established way back in 1899, but it received its license in India in 2010
Their scores range from 300-850, and a score of 670 and above is accepted for credit
You can check your score for free, but for a detailed report, you have to pay Rs.250 for a month’s subscription
What is CRIF High Mark Score?
CRIF High Mark is approved by RBI to function as a credit rating company in India. It caters to over 10,500 banks and financial institutions, and 600 insurance companies.
Suggested Reading: CRIF Score Full Form: What It Means and Why It Matters
Their services are available in over 40 countries including India. In addition to these facts, there are a few others worth noting -
It was established in 2007, and it was licensed to operate as a credit bureau in 2010
Their scores range from 300-900, and a score above 700 is generally considered good
You can get monthly reports at Rs.399 + GST
Conclusion
Banks in India use the TransUnion CIBIL, Experian, Equifax, or the CRIF High Mark score. Out of these, the TransUnion CIBIL score is the one that is used most commonly. All credit rating bureaus generate credit scores and reports which help lenders assess the creditworthiness of borrowers.
The credit information bureaus receive information from various banks, insurance companies, and NBFCs and assess credit scores based on timely payments, credit age, number of loans, and other such factors. Banks may use any of the recognized credit scores according to their need and preference.
To maintain a good credit score and report, you must check your own report regularly. It is best to take a subscription to any one of the bureaus and monitor your score. After taking a subscription, you can also raise disputes if you see any discrepancy in your report.
Banks in India use the TransUnion CIBIL, Experian, Equifax, or the CRIF High Mark
CRIF High Mark
CRIF stands for Centre for Research in International Finance, an acronym for the credit research agency that was established in 2007. This is an entity based in India and Europe. In 2014, CRIF acquired a stake in High Mark and the company was rebranded as CRIF High Mark.
score. Out of these, the TransUnion CIBIL score is the one that is used most commonly. All credit rating bureaus generate credit scores and reports which help lenders assess the creditworthiness of borrowers.
The Credit Information Bureau (India) Limited (CIBIL) is the most prominent among the four credit information companies licensed by the Reserve Bank of India. The CIBIL score, ranging from 300 to 900, is widely used in India and is maintained by CIBIL Limited, a part of the American multinational group TransUnion.
ECIS is a joint venture between Equifax Inc and seven Indian financial institutions namely, Bank of Baroda, State Bank of India, Kotak Mahindra Prime Ltd, Bank of India, Sundaram Finance Limited, Union Bank of India and Religare Finvest Limited.
For the majority of lending decisions most lenders use your FICO score. Calculated by the data analytics company Fair Isaac Corporation, it's based on data from credit reports about your payment history, credit mix, length of credit history and other criteria.
Banks in India use the TransUnion CIBIL, Experian, Equifax, or the CRIF High Mark score. Out of these, the TransUnion CIBIL score is the one that is used most commonly. All credit rating bureaus generate credit scores and reports which help lenders assess the creditworthiness of borrowers.
CIBIL score is one of the eligibility requirements before getting your Credit Card approved. These points can help you understand how to check eligibility for credit in order to get a Credit Card. To apply for HDFC Bank Credit Card, click here. * Terms & conditions apply.
Conclusion. As all banks have been mandated by RBI to be a member of 4 credit bureaus, they all may use any of the top scores. Most lending institutions in India consider the Experian score along with the TransUnion CIBIL score.
A credit score is typically a 3 digit number between 300 and 900. Both Equifax and CIBIL™ credit scores are in the same range. However, do keep in mind that there may be differences in the exact score between the two bureaus for the same customer, though it may not be significant.
A CIBIL Score of 777 falls within the excellent credit score range, which typically ranges from 750 to 900. This impressive score suggests that you have managed your credit responsibly, making timely payments, and maintaining a healthy credit history.
When you are applying for a mortgage to buy a home, lenders will typically look at all of your credit history reports from the three major credit bureaus – Experian, Equifax, and TransUnion.
The CIBIL TransUnion Score, along with other variables like balance on other loans/cards of the customer, is used to evaluate the credit worthiness of a customer.
Some banks pull from Equifax, some from Experian and others from Transunion when evaluating credit card applications. Other banks pull your credit report from two or even all three bureaus.
Neither your TransUnion or Equifax score is more or less accurate than the other. They're just calculated from slightly differing sources. Your Equifax credit score is likely lower due to reporting differences. Nonetheless, a “fair” score from TransUnion is typically “fair” across the board.
Credit scoring models can weigh certain information in your reports more heavily than other credit score factors. For example, one scoring model may put more emphasis on total credit usage than others. Because there are varied scoring models, you'll likely have different scores from different providers.
While the FICO score is also available in India apart from other markets, it is not big here since it is built on credit card payment data and India does not have significant credit card penetration. India had 95 million credit cards at the end of October, as per data from the Reserve Bank of India.
CIBIL India is part of TransUnion, an American multinational group. Hence credit scores are known in India as the CIBIL Transunion score. CIBIL Score is a 3-digit numeric summary of your credit history, rating and report, and ranges from 300 to 900. The closer your score is to 900, the better your credit rating is.
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