Credit Bureaus – CIBIL, Equifax, Experian & CRIF Highmark (2024)

Lenders like banks and non-banking finance companies rely on credit reports before approving your personal loan or credit card application. A credit report is computed by credit information companies which are also known as credit bureaus. The credit bureaus collects, collates and aggregates data from its members (individual consumers and lending institutions) to provide information related to the credit history and creditworthiness of an individual. At present, there are a total of 4 credit bureaus in India. All credit bureaus in the country are licensed by the Reserve Bank of India (RBI).

What are Credit Bureaus?

Credit bureaus, also referred to as Credit Information Companies (CICs), are pivotal entities in the financial realm. They act as intermediaries, systematically gathering, managing, and distributing credit-related information for individuals and businesses.

Their primary function is to provide crucial data for lending decisions made by various financial institutions like banks, mortgage lenders, and credit card issuers. Operating within a regulatory framework, credit bureaus are often overseen by financial regulatory bodies. In the Indian context, Credit Information Companies (CICs) are regulated by the Reserve Bank of India (RBI) under the Credit Information Companies (Regulation) Act, 2005. Consumers also engage with credit bureaus as customers, utilizing services that offer insights into their credit history. As per regulatory requirements, individuals are entitled to request a free full credit report, including the credit score, once a year.

Credit bureaus act as conduits, furnishing credit reports to lenders or creditors. This empowers financial entities to make well-informed decisions when evaluating credit applications, be it for loans, credit cards, mortgages, or other financial instruments. Beyond information dissemination, credit bureaus are responsible for maintaining the accuracy of information in credit reports. Consumers have the right to report discrepancies or errors to credit bureaus, which are obligated to conduct thorough investigations and rectify any inaccuracies.

Credit bureaus methodically collect a comprehensive set of credit-related data from diverse sources. This includes information from lenders, banks, collection agencies, and public records, covering various financial activities such as credit card usage, loans, and overdraft facilities. The gathered data is meticulously stored in the credit bureau's database. Regular updates are performed to ensure the database reflects any changes or new information regarding an individual's or business's credit accounts. Utilizing the amassed credit information, credit bureaus compile detailed credit reports. These reports provide a comprehensive overview of an individual's or business's credit history, organized into distinct sections like personal information, repayment history, credit utilization, and credit inquiries. A fundamental aspect of the credit bureau's role is assigning three-digit credit scores based on the information present in credit reports. These scores serve as numerical indicators used by potential lenders to assess the creditworthiness of individuals or businesses.

Here’s a List of 4 Credit Bureaus in India:

• TransUnion CIBIL
• Equifax
• Experian
• CRIF Highmark

Comparison of the 4 Credit Information Companies in India

CIBIL:

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. The score reflects credit history and plays a crucial role in loan applications. A good score, typically 700 or above, enhances the chances of loan approval. It takes 18 to 36 months of consistent credit usage to build a satisfactory CIBIL score. The score is not the sole factor; lenders also consider credit reports and other details when assessing an applicant's creditworthiness. Financial prudence, such as timely bill payments and responsible credit use, is essential for improving the CIBIL score.

Equifax

Equifax, an American credit information company operating globally in 15 countries, has been active in India since 2010 under the Credit Information Companies (Regulation) Act. In India, it operates as Equifax Credit Information Services Private Limited (ECIS) through a joint venture with seven major Indian financial institutions. Equifax collects credit-related data from lending institutions in compliance with RBI mandates and generates a three-digit credit score for individuals, ranging from 300 to 900. This data is detailed in a comprehensive Credit Information Report (CIR), providing insights into an individual's credit behaviour. The Equifax Consumer Credit Database, characterized by a broad reach and constantly updated, accurate information, is operated with sophisticated technology and global standards. It benefits both lenders and borrowers by expediting loan approval processes, improving efficiency, and enhancing transparency. Equifax's database also supports various value-added products, including credit risk management, fraud detection, and marketing tools.

Experian

Experian PLC, a globally recognized consumer credit reporting company, operates in 37 countries, including India, where it is one of the four credit bureaus. Established in 2010 in India, Experian collects credit information on individuals and companies, providing credit scores and detailed Credit Information Reports (CIR). As an independent entity licensed by the Reserve Bank of India, it serves member institutions like banks and NBFCs, helping them make informed lending decisions. Checking the Experian credit score before applying for a loan is crucial, and factors affecting the score include timely payments, credit history length, inquiries, and negative issues. Improving the score involves responsible financial practices. A good Experian score is typically above 750, while a lower score may lead to more challenging loan approvals with less favourable terms. Regular monitoring of the credit score is essential for maintaining financial health and securing preferable loan conditions.

High Mark Credit Score

CRIF High Mark is a prominent provider of Credit Information, Business Information, Analytics, Scoring, Credit Management, and Decision Solutions in India. As an RBI-licensed credit bureau, CRIF High Mark offers information and analytical solutions to various sectors, including banks, NBFCs, insurance companies, and telecom service providers. Catering to diverse borrowing segments such as retail, microfinance, MSMEs, and commercial borrowers, CRIF High Mark plays a crucial role in assessing creditworthiness.

The CRIF Credit Score, a three-digit number ranging from 300 to 900, is a key metric for evaluating an individual's creditworthiness. A score above 700 is considered good, indicating responsible repayment behaviour and enhancing the likelihood of loan approval. The score is reflective of an individual's credit history. A CRIF credit information report (CIR) provides a comprehensive credit profile, including personal information and a credit summary. A ‘blank CRIF Credit Report’ (NH) indicates the absence of credit history in the database. The Personal Credit Score, influencing loan approvals, is typically considered good above 700. The Business Credit Score is vital for assessing a company's creditworthiness, especially for loan approvals. For individuals seeking their personal credit report from CRIF, the process involves filling in details, selecting a report type (free, paid subscription, or paid without a score), and authenticating the inquiry by answering security questions. The report is then delivered via email.

Similarities Between the Credit Bureaus

All the four credit bureaus in the country are licensed by the Reserve Bank of India (RBI). Lenders like banks and non-banking finance companies (NBFCs) send your credit information to all the credit bureaus. They do not differentiate between the bureaus and share all your details related to your credit with them. Each credit bureau has their own algorithm which they use to calculate your credit score. Therefore, credit scores from all the credit bureaus are considered as valid. Although, the algorithm to calculate credit score can be different for different bureaus, the five components that are taken into consideration while calculating the credit score remain the same. Credit bureaus consider factors like repayment history, type of credit, age of credit, credit exposure, and credit inquiries while calculating the credit score. It must be noted that credit scores from two credit bureaus can be different, however, they will be accepted as valid. A marginal difference in credit scores from two different bureaus is common. A difference of around 50-60 points in the credit score is generally observed by banks and NBFC.

Benefits of the Consumer Credit Database

Lender's exposure to risk is mitigated: Getting access to information on every customer’s inquiry and trade lines over a long period of time will allow the lenders to look into their creditworthiness. They can then calibrate the risk exposure. Having a judicious risk management in place which is based on in-depth data, will affect the revenues.

The decision-making process becomes faster: Having access to the information mentioned above helps every lender in making an informed decision. A credit score gives the lender an idea of the customer’s creditworthiness. The Credit Information Report gives them a quick and rounded idea of the customer’s credit behaviour and the short-term and long-term perspectives will help the lender evaluate the borrower better and take a quick decision.

Easier tracking of borrower portfolio: When you have a database, which allows its member institutions to get access to it, the lenders can track the credit performance of their borrowers on a periodic basis and take better decisions.

The identification process: The vast data that is in the customer database leads to a better consumer identification. The Equifax consumer database is linked to Indian government databases like and NSDL for PAN and AADHAR card validation. This makes the process of authentication easier.

FAQs on Equifax Vs CIBIL Vs Experian Vs Highmark Credit Score and Credit Report

1. What is the meaning of Hallmark of Highmark credit score?

   The summary of the credit history in the numerical format is called Highmark credit score.

2. Why does the credit score vary depending on the bureau?

   The credit score is different because of the algorithm that is used by each bureau.

3. Is the credit score provided by different bureaus valid?

   Yes, the credit score provided by different bureaus are equally valid.

4. What is the main difference between Experian and Equifax?

   The information that is collected and the way it is reported is the main difference between Experian and Equifax.