Lenders such as non-banking finance companies (NBFCs) and banks depend upon the credit report before they approve your credit card or loan application. Note that credit reports get computed by the credit information companies known as the credit bureaus. Credit bureaus collect, aggregate, and collate the data from their members to endow info linked with the creditworthiness and credit history of individuals. Currently, there are overall four credit bureaus present in India. All the bureaus in India are licensed by RBI (Reserve Bank of India).
Here is a list of four credit bureaus in the country:
∙ CRIF Highmark
∙ Equifax
∙ TransUnion CIBIL
∙ Experian
Here is a comparative analysis among all 4 credit bureaus:
| Parameter | TransUnion CIBIL | Equifax | Experian | CRIF Highmark |
| Date of establishment | 2000 | License approval in 2010 | License approval in 2010 | License approval in 2010 |
| Report cost | Rs 550 for checking of CIBIL score | Rs 400 for checking of Equifax credit score | Rs 399 for checking of Experian credit score | Rs 399 for Highmark credit score check-up |
| Scoring system | All the Indian credit bureaus provide credit scores between 300 and 900, wherein 900 is the maximum limit. A credit score of 750 & above is considered good. | All the Indian credit bureaus provide credit scores between 300 and 900, wherein 900 is the maximum limit. A credit score of 750 & above is considered good. | All the Indian credit bureaus provide credit scores between 300 and 900, wherein 900 is the maximum limit. A credit score of 750 & above is considered good. | All the Indian credit bureaus provide credit scores between 300 and 900, wherein 900 is the maximum limit. A credit score of 750 & above is considered good. |
| Services and products | For the consumers:
∙ CIBIL Transunion credit score ∙ Market insights ∙ Credit information report For companies: ∙ CIBIL company credit information report ∙ Portfolio review reports ∙ CIBIL bureau analyzer Additional solution: ∙ Fraud prevention ∙ Portfolio management ∙ Customer acquisition ∙ Customer solution |
For consumers:
∙ Equifax alerts ∙ Credit information report ∙ Equifax risk score ∙ Equifax portfolio review For companies: ∙ Portfolio management ∙ Credit risk and fraud management ∙ Industry diagnostics, etc. |
For consumers:
∙ Experian credit information report For companies: ∙ Collection and money recovery ∙ Customer acquisition ∙ Customer engagement and targeting ∙ Data & analytics ∙ Customer management
|
For consumers:
∙ Microfinance credit reports ∙ CRIF Highmark credit info report For companies: ∙ Identification & anti-fraud services ∙ Commercial score ∙ Predictive scorecards & analytics Additional solutions: ∙ Collection management ∙ Business decision management and rules ∙ Loan origination ∙ Collection management ∙ Loan origination ∙ Deduplication platform ∙ External data connector |
| Time is taken to avail credit report. | On clicking on my CIBIL score check online option, you can get the report instantly. However, note that while a credit report availed once a year is free, availing more reports come with a cost. | Online credit report gets delivered instantly once the payment is made | Experian credit score on your report is delivered instantly once you make the payment | Online credit report gets delivered instantly once the payment is made |
Different similarities among credit bureaus in India
All 4 credit bureaus in India hold the license by RBI (Reserve Bank of India). Lenders such as NBFCs (Non-Banking Finance Companies) or banks transfer all your credit-linked information to all credit bureaus. They hardly differentiate between credit bureaus and ensure to share all your crucial details and credit-linked data every month. Every credit bureau uses its own set of algorithms to compute your credit score. Thus, credit scores from all credit bureaus are thought to be valid. While algorithms to compute credit score can be distinct for distinct bureaus, 5 components that are considered while computing your credit score stay the same. Credit bureaus look at crucial factors such as credit type, repayment history, credit age, credit inquiries and credit exposure while computing the credit score. It should be remembered that the credit scores from 2 credit bureaus can be completely different, but they will be considered valid. Marginal differences in the score from 2 distinct credit bureaus are common. Differences of nearly 50 to 60 points in credit score are usually looked at by NBFC and banks.
Basic advantages of consumer credit database
The lender’s risk exposure gets mitigated.
Getting the information access on each customer’s inquiry and the trade line over a long time will permit the lenders to look out into their credibility. They then can calibrate the current credit risk exposure. Having prudent risk management in place based on the in-depth data can impact the revenues.
Decision making procedure becomes quicker.
Having the accessibility to the info mentioned above allows every lender to make an informed decision. Credit score endows the lender with an idea about the customer’s credibility. Credit information report endows them with an instant and fair idea about the credit behaviour of customers and short term as well as long term perspectives. This allows lenders to assess the credit applicant better and make instant decisions.
Simpler tracking of applicant’s portfolio
When you hold a database, which permits their member institution to get the accessibility to, the lender simply can track the credit performance of their applicant on a periodic basis and make better decisions.
Identification procedure
Vast amount of data that is in the customer database results in better consumer identification. Equifax consumer database is attached to the Indian government database like NSDL for Aadhaar card and PAN validation. The procedure of authentication becomes easier owing to this.
Conclusion
A credit report is a quick summary of how you manage your credit accounts, including different accounts and your credit repayment history and certain other info that is reported to the 4 credit bureaus by your creditors and lenders. Potential lenders and creditors utilize the credit report for their decision-making procedure to determine whether to approve your credit & at what terms and conditions. In India, potential employers might also access your reports to know your Highmark credit score or score of other credit bureaus to assist them in determining whether to offer the employer. Thus, for such reasons, it is crucial to assess your credit reports from all 4 bureaus regularly to make sure the info is complete and accurate with zero discrepancies.