Top 6 Credit Bureaus in India That You Should Know

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Dec 30, 2020CIBIL

Credit Bureaus in India and all over the world - have a primary purpose - which is to analyse the financial transactions specifically loans due and their payments for people as well as businesses. The bureaus then give Credit ratings or scores based on this study. These Credit scores /ratings are an integral part of the loan process and are heavily relied upon by lending institutions such banks, NBFCs and so on.  . Lenders check the credit score  of each applicant before giving loans. Let’s understand what Credit Bureau and Credit rating means.

What is a Credit Bureau?

Credit Bureau is an agency which collects and analyses data related to a person or a business entity’s transactions which are made on credit. These include loans taken, credit cards used, overdraft facilities, etc.  and their repayments.. This analysis may also include the data regarding income taxes, timely payment of utility bills and so on. The information is collected from lending companies, data collection agencies, money collection agencies and various others. The purpose of collecting and analysing such information is to create a profile of the creditworthiness of the person which includes repayment behaviour, default history, and overall financial behaviour (debt to income ratio).

What is Credit Score?

The Credit bureaus in India collect financial information about a person / entity which is analysed after which, a credit score is given to the person / entity. This credit score is a number that may be between 300 to 900. The score can be analysed as follows:

  • A score of 750 or more  is an excellent credit score and indicates responsible financial behaviour
  • A score between 600-750 is a medium score, indicating a slightly risky financial behaviour. This could happen due to a few missed payments, not filing ITR, or a high amount of debt. By timely payment of EMIs and reducing the number of outstanding loans, this score can easily be increased over time. ;
  • A score Below 600 –  This is a poor credit score.  Individuals with scores in this range will need to make quick and drastic financial decisions to improve credit score so that they  may be eligible for receiving financial loans in the future. 

A good credit score is essential so that one can easily get loans or access to credit limits easily at competitive rates of interest whenever the need arises. When a person has a good credit score – lending institutions are willing to give loans without hassle and at cheaper rates.

Must Read: How to Increase Credit Score from 500 to 750?

List of Credit Bureaus in India

There are 6 major credit rating agencies in India.

1. TransUnion Credit Information Bureau (India) Limited or CIBIL

CIBIL is a comprehensive credit bureau which was established in 2000 with a license to operate in 2010. CIBIL covers the analysis for individuals as well as organisations. It gives a credit score rating that varies between 300 to 850 – where 720 and above is an excellent score. For companies and other entities it gives a score called PERFORM score. 

2. CRIF High Mark

CRIF High Mark was established in 2007 and obtained a license in 2010. The distinguishing factor of this is that the CRIF High Mark is the only one approved to operate in India by the Reserve Bank of India. CRIF conducts credit rating analysis for individuals and corporates. The credit score rating falls between 300-850.

3. Equifax

Equifax started off as a credit giving company in 1899 and in 2010 became a licensed credit rating agency. The credit score rating from Equifax lies between 1 to 999. Equifax also provides risk scores and portfolio scores in addition to credit scores for individuals. For companies they also provide credit fraud reports, portfolio management, risk management reports, industry diagnosis, and other reports may be obtained.

4. Credit Rating Information Services of India Limited (CRISIL)

CRISIL, founded in 1987 is a leading global analytics agency and operates in several countries such as India, UK, USA, Hong Kong, China, Singapore, Poland and Argentina. It can conduct market surveys through its stakeholders, and not only provides credit scores and other analytic reports, but also provides risk advisory services.

Must Read: Minimum Credit Score Required for a Personal Loan

5. ICRA, which was formally known as the Investment Information and Credit Rating Agency of India Limited

ICRA is a publicly listed credit rating agency which was established in 1991 and provides credit ratings, corporate governance ratings, and performance ratings to hospitals, construction companies, mutual funds, etc.

6. Experian

Experian is a licensed credit rating agency since 2010 in India. It was established in 2006 and it conducts analysis of credit reports on individuals and companies. The reports take about 20 days but are not very expensive. The credit scores rating range from 300 to 900.

While all these Credit Rating Agencies create the scores and give the reports they do not influence the decision to give or not give the loan. 

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