Credit Bureaus In India – CIBIL vs Equifax vs Experian vs Highmark

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When it comes to lending money, even the banks needs to be assured about the person to whom they are giving loan. Approximately 5 years back, customer background verification for credit worthiness was a difficult task. However, Credit Information Companies (or Credit Bureaus) have made this task easier. Credit Information Companies are financial institutions who collect and maintain credit and loan related information of individuals and commercial entities. Based on this information, they generate a credit report and score of every individual that helps the bank in approving or rejecting the individual’s loan application.

know your score

As per the latest guidelines, it is mandatory for every bank and financial institution to be a member of atleast one Credit Information Company in India. These companies collect and maintain the credit/loan information of every individual who has a PAN card from the member credit institutions. This information is updated regularly every month or on short intervals.

How Does Credit Bureaus Work In India?

As mentioned above, Credit Bureaus of Credit Information Companies collect, maintain and provide credit information (related to credit cards and loans) of an individual from banks and other member institutions and share the same with them that defines the credit worthiness of an individual. This helps the bank authorities to make a decision of whether to lend money and if yes, then at what terms and conditions. Here, one must note that CIC does not act as a watchdog. It caters the information related to salary, savings account, fixed deposits and other information are not shared by the members.

credit score rating

For example, if you wish to take a personal loan from a bank, your bank will contact the credit bureau for your credit report and score. This report contains all the payment history, including past defaults (if any). Based on the credit score and report, your bank will make a decision on whether the loan should be granted to you or not. More credit score means higher chance of getting a loan at a considerate interest rate.

In India, there are four credit bureaus namely TransUnion CIBIL, Equifax, Experian and Highmark.

TransUnion CIBIL

India’s first credit bureau/credit information company, TransUnion CIBIL plays an important role by helping banks and other financial institutions to manage their business. It is organized into 3 divisions, namely consumer bureau, commercial bureau and MFI bureau.

Year Of Establishment – August 2000

Scoring System – 300-900 (900 is the best credit score)

Charges – Free credit report once a year. Beyond that, it charges Rs. 550

Time taken to generate report – 7 days

Equifax

Equifax India is a joint venture between Equifax USA, State Bank of India, Kotak Mahindra Bank, Bank of Baroda, Religare Finvest Ltd., Sundaram Financial Services and Union Bank of India. It offers a range of credit services including information, business analysts and risk management.

Year Of Establishment – 2010

Scoring System – 1-999 (1 being the lowest)

Charges – Free credit report once a year. Beyond that, it charges Rs. 400 (+taxes)

Time taken to generate report – 10 days

Experian

Experian Credit Information Company of India or simply Experian is a joint venture of GUS Holdings, Axis Bank, Union Bank of India, Indian Bank, Federal Bank, Punjab National Bank, Sundaram Finance Ltd, Magna Fincorp Ltd and VIC Enterprises Private Ltd to provide credit information services to banks and individuals in India. It has also tied up with online financial marketplaces like Paisabazaar to offer free credit report and score to its customers.

Year Of Establishment – 2006 (got license in 2010)

Scoring System – 300-900 (900 is the best credit score)

Charges – Free credit report once a year. Beyond that, it’s Rs. 399 (including taxes)

Time taken to generate report – 20 days

Highmark

CRIF Highmark is the only credit bureau in India that caters the need of segments like MSME, commercial borrowers, retailer, micro-finance borrowers. It provides analytics, data management and related credit services in order to sustain the financial needs of business and customers.

Year Of Establishment – 2007 (got license in 2010)

Scoring System – Not Available

Charges – Rs. 399

Time taken to generate report – 5 minutes

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