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.
Suggested Reading:
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.
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.
Your score is a three-digit number ranging between 300-900 points that provide the banks a gist of your credit health. Most banks have the minimum requirement of 750 points, however other factors like your income and stability are also of great importance.
Experian is a credit information company that has been operating worldwide for the past 125 years. In India, it acquired the license to operate in 2010, is recognized by the Securities and Exchange Board of India (SEBI), and is authorized by the Reserve Bank of India to collect information from lending companies.
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.
TransUnion CIBIL is among the oldest and most reputable Credit Information Companies in India. Nearly all leading organisations are members of the bureau.
CIBIL offers a detailed credit report. Equifax also offers a detailed report but it also provides a pictorial representation of the credit report which is easier to understand. CIBIL has a larger network of clients and partner banks and financial institutions when compared to Equifax.
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.
While the FICO® 8 model is the most widely used scoring model for general lending decisions, banks use the following FICO scores when you apply for a mortgage: FICO® Score 2 (Experian)FICO® Score 5 (Equifax) FICO® Score 4 (TransUnion)
A 700 CIBIL Score is considered to be in the "Good" range. While it may not be the highest possible score, it still reflects a commendable credit history. Most lenders consider a score of 700 or above as a positive indication of a borrower's creditworthiness. However, 750+ is viewed as the ideal credit score.
So foreign lenders will not have access to your American credit score, but you can still expect a review of your basic financial information if you want to apply for a loan like a mortgage or car loan. Overseas banks and lending institutions may inquire about outstanding debts in your home country.
Another reason for the differences in Experian and CIBIL scores lies in the variations in the data reported to these bureaus. Lenders may report data to one bureau and not the other, leading to disparities in the credit information available to each bureau.
Credit card issuers and lenders may use one or more of the three major credit bureaus—Experian, TransUnion and Equifax—to help determine your eligibility for new credit card accounts, loans and more.
The main difference lies in the regions where these scores are prevalent. CIBIL is widely used in India, while FICO is a popular credit scoring model in the United States. Both scores, however, aim to reflect an individual's creditworthiness based on their credit history and financial behaviour.
A credit score is an indicator of a person's creditworthiness, or their ability to repay debt. It is usually expressed as a number based on the person's repayment history and credit files across different loan types and credit institutions.
It is used by lenders to assess the creditworthiness of the prospective borrower i.e. the risk involved in lending money to an applicant. Knowing your own credit score can help you assess and monitor your personal credit health.
There's some anecdotal evidence suggesting that a handful of issuers often pull Equifax reports when reviewing credit card applications, including Chase, Citi and Discover.
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.
PenFed Credit Union is the only loan company that uses only your Equifax credit data. In most cases, you won't be able to determine beforehand which credit bureaus your lender will use. In some cases, lenders will pull your credit report from two or even all three major credit bureaus.
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.
Address: Suite 492 62479 Champlin Loop, South Catrice, MS 57271
Phone: +9663362133320
Job: District Sales Analyst
Hobby: Digital arts, Dance, Ghost hunting, Worldbuilding, Kayaking, Table tennis, 3D printing
Introduction: My name is Kieth Sipes, I am a zany, rich, courageous, powerful, faithful, jolly, excited person who loves writing and wants to share my knowledge and understanding with you.
We notice you're using an ad blocker
Without advertising income, we can't keep making this site awesome for you.
