“Who checks my credit score?”
“What is the meaning of credit report?”
“What is CIBIL?”
“How can I get a free credit report?”
“How to boost my credit score?”
If the above-mentioned questions have been worrying you, then don’t fret anymore.
Hi! I am Loan Singh and welcome to the Loan Singh Finance Blog.
Today we look at Credit Bureaus, the different ones present in India and how they are like the “Upar wala sab dekh raha hain” of credit application.
What is a Credit Information Company or Credit Bureau?
It’s not your fault if you can recognize only CIBIL as the credit information company. CIBIL is widely used and is considered to be the best. A credit information company simply collects credit information from banks and other credit institutions. This credit information is for customers who own credit accounts in various banks and other credit institutions.
How does a Credit Information Company Work?
Credit information companies (CIC) are specialized financial institutions that create a credit report and corresponding credit score based on the credit information they receive from different credit institutions such as:
- Credit card providers
- Insurance companies
- Collection agencies
This credit information pertains to their respective customers. The CIC generated report is then used by the credit lender or credit grantor to decide if the credit applicant’s request can be approved or not.
This report contains your financial information along with your
- Personal information
- Number of credit accounts
- Payment history
- Credit defaults
- Credit applications
- Corresponding approval or rejections
- Total credit limit
- Age of accounts
- Account status’ (written off, settled, current or closed)
- Outstanding loan amounts
Credit score is a range that usually falls between 350 and 850. The higher the credit score, the better your chances of loan approval. The report is crucial in getting an insight into the applicant’s credit history.
The report and score save the lender, time and effort, when evaluating fresh credit requests. Lending institutions adopt a CIBIL or Experian check of a borrower because any lending institution needs to embrace risks in order to provide loans to an individual especially for unsecured loans which involve no collateral. The lenders need assurances that you will repay the loan over the approved period. This assurance is received via a credit score.
You, as a borrower, are also benefited because you are made aware of your credit situation and hence take charge of your finances as per the report.
Free Credit Score Check
Now, there are many resources available online that promise a free credit score check. But, it is recommended you approach the credit bureau directly to get a copy of your credit report. This is because, in case of any discrepancies, you can get it sorted directly with the bureau.
Credit score plays a crucial role in your financial freedom. Being responsible for the use of credit, timely repayments of EMI and balancing the number of loans and credit cards will ensure a good credit score. This will also prevent any financial hiccups along the way.
Does Loan Singh checks credit score?
Yes, Loan Singh checks your credit report while evaluating your online personal loan application. You are applying for the loan from the confine of your home, never having to come see our genuine- hardworking-team-filled office. We only ask for your Aadhaar, PAN and Bank statement. Where else can you expect a much easier process in the digital economy world?
Your credit score indicates how prompt you have been with your past credit obligations. Availing a personal loan via Loan Singh is advantageous because of the complete online process and minimal involvement of paperwork. So, no time is wasted in cross verifying any paperwork. The personal loan amount, along with interest rate, is calculated for the entire tenure, and in case you want to clear-off the loan before tenure completion, no pre-payment penalty is levied by Loan Singh. The idea is not to strain you with credit but to make sure that your salary and savings permit you to avail credit.
Can you handle the wait-time for a personal loan from banks? The unending documents and paperwork will test your patience anyway. Trust me when I tell you that an online loan is the best solution for you in order to get quick funds without any delay. Simply go to www.loansingh.com and apply for an online personal loan for a number of purposes.
Credit Bureaus in India
In India, there are 4 credit information companies (Yes, that’s what they are called) or credit bureaus, that are authorized by the Reserve Bank of India. They are:
CIBIL – Credit Inform Bureau (India) Limited, which is a part of US based ‘TransUnion’
Also known as TransUnion CIBIL, it is the first Credit Information Company of India. It has a strong member base of close to 1000 entities which include private and public sector banks, NBFCs, house-finance companies among others.
It maintains credit information of close to 750 million trades across divisions such as micro finance institutions, commercial bureaus and consumer bureaus. The CIBIL score is the collective score generated as a combination between the three divisions. Its score ranges from 300 to 900.
Experian (based out of Ireland)
Jointly operated by companies such as GUS Holdings BV (Netherlands), Axis Bank Limited, Union Bank of India, Federal Bank Limited, Indian Bank, Sundaram Finance Ltd, Punjab National Bank, Magna Fincorp Ltd and VIC Enterprises Pvt Ltd, Experian was started in 2006 and was the first CIC to receive a licence under the CIC Act of 2005, in the year 2010. Its score ranges from 330 to 830.
Equifax (based out of the US)
Founded in the state of Atlanta, USA and registered under the CIC Act in 2010, Equifax is one of the largest credit agencies in the US. It keeps detailed credit information for small, medium and big organizations alike. It is also known to provide a detailed and insightful credit report.
CRIF High Mark (Mumbai based)
The Highmark or High Mark Credit Information System was started in 2005. They offer credit reports and credit scores to individuals and members alike.
You must also remember that all the above bureaus receive the same information and all 4 are equally valid. Their scores may differ based on the respective scoring models. Therefore, a word of advice to the lenders is to be aware of these differences before deciding on the eligibility of the credit applicants.
Too much credit bureau jargon to handle? Check the table below to understand better.
Loan Singh is a digital lending platform that prides in providing online and unsecured personal loans to salaried individuals. You can apply for quick funds as an easy emergency loan which is not a bank loan, but provide a loan with best personal loan interest rates. The instant funds, or instant loans, are small loans taken for purposes such as:
- Home improvement loan/Home renovation loan
- House repair loan
- Marriage loan/ Wedding loan
- Medical loan
- Second-hand car loan
- Second-hand bike loan
- Consumer durable loan
- Vacation loan
- Debt consolidation loan
- Credit card refinancing loan
- Job relocation loan
- Travel loan
- Festival loan
You can calculate your easy EMIs using our personal loan EMI calculator. We accept bank statement, PAN, and Aadhaar for quick loan approval. A bad credit score or credit report errors can lead to personal loan rejection. The ‘Loan Singh Blog’ is one of the best finance blogs in India.
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