The Reserve Bank of India has granted credit information companies (CICs), also referred to as credit bureaus, a license to operate in India. CICs are specialized financial institutions that are responsible for gathering and maintaining information about Indian consumers’ and businesses’ credit behavior. These businesses then utilize this information to create credit reports and scores for specific customers across a range of lenders and loan kinds. CIBIL and Experian both are Credit Monitoring organizations. There are four credit information companies in India at the moment. The CIBIL Score, which varies from 300 to 900, is a three-digit numerical summary of your credit history, rating, and report. Your credit rating improves when your score approaches 900.
- CIBIL
- Equifax
- Experian
- CRIF Highmark
In This Article, we are gonna focus on Major two Credit score checking companies.CIBIL and Experian.
What is CIBIL?
This credit bureau, which is formally known as TransUnion CIBIL Limited, is a component of the American multinational firm TransUnion. It is among the most well-known credit reporting agencies in India.
In India, CIBIL keeps credit files on about 600 million people and 32 million businesses in addition to producing credit reports for both individuals and businesses.
In 2007, CIBIL unveiled the CIBIL Score, the country’s first generic risk scoring algorithm that evaluates risk based on a borrower’s credit history. Since then, lenders have evaluated a borrower’s creditworthiness and debt-handling capacity using the CIBIL score.
What is Experian?
Experian is a multinational provider of credit ratings; it presently operates in 44 nations and has so far assisted 3.5 billion credit decisions. It’s been in business for 125 years.
Experian provides its clients with business tools like Market Switch and Powercurve Origination in addition to credit scoring so they can further analyse the score. The PowerCurve product from their Decision Analytics was named a winner at the 2021 Artificial Intelligence Excellence Awards.
In India, Experian obtained a licence as a credit bureau in 2010. Since then, it has aided millions of people and organisations in accessing financial services and making wiser financial decisions. Numerous lenders have benefited from their services by making wiser lending selections and lowering the risk of fraud and identity theft.
Using their cutting-edge technology and credit assessment tools, Experian can rapidly produce individual and company credit reports based on the data they get from lenders. When deciding whether a SME customer is eligible for a business loan from one of our lender partners, CreditEnable uses the Experian credit report.
How CIBIL and Experian Different
Both bureaus utilise unique techniques and algorithms to determine credit scores. However, practically all Indian lenders (banks and NBFCs) base their credit evaluations on the Experian report.
Experian, one of the top innovators in the credit industry, provides lenders with more detailed information on a borrower’s risk profile, enabling them to assess that borrower’s credit profile with greater precision. Additionally, Experian offers lenders more insightful information about customers and businesses in their credit reports. A “credit limit recommendation” is also included in the Experian credit report, simplifying the evaluation process for lenders.
As was already noted, CIBIL has the biggest lender subscription in the nation. Additionally, CIBIL has access to a wide range of data points that it employs to provide a thorough knowledge of a person’s or business’s credit history and creditworthiness. High data security and protection standards are upheld by CIBIL, which also develops information solutions for organisations to help them grow more quickly and make better decisions regarding risk management.
