Experian & CIBIL


​What Are the Important Things You Must Be Aware of Experian & CIBIL?

Experian & CIBIL

Last Updated on 1 year by admin

Equifax and CIBIL are important to credit information companies that are authorised by the RBI (Reserve Bank of India). Both Equifax and CIBIL collect as well as record the credit-linked activities of consumers all over the country and process those financial raw data to endow you with user-friendly and readable credit scores and reports. So, you can check free CIBIL score or check free credit score through Equifax by straightaway visiting their online sites. Alternatively, you can also check your score by visiting online lending marketplaces. 

The credit score which you provide in the form of numbers begins from 300 and goes up to 900 depending on your financial record. You must know the importance of Equifax and CIBIL when you place an application for a loan, may it be unsecured or secured or even for a credit card. Every expert lender whether it is NBFC, bank or any credit union the initial thing it looks for your credit profile and then the other eligibility parameters. Equifax combines all your financial history, which involves your past and present borrowings, borrowing repayments, and credits all together in a single report that contains thorough info. Also, CIBIL offers the same facility and provides reports that contain your credit behaviour. If you as a customer default on any repayment, it is instantly reflected in your credit report. 

CIBIL was introduced in 2000 and the present shareholders of CIBIL include IIFL, Bank of India (BOI), Aditya Birla Trustee Company, TransUnion, and UBI. However, Equifax was started in 2010. It is a joint venture of the US. Both credit bureaus are headquartered in Mumbai. Credit score offered by both Equifax and CIBIL ranges between 300 and 900. The score offered by both the bureaus is more a less the same. However, it might differ by some credit points, in the case that it differs by over 50 points for you, then you must obtain the CIR (credit information report) copy and check reports for any discrepancies. 

Also Check: Equifax Credit Score

The RBI (Reserve Bank of India) has instructed all financial institutions to offer the details of every customer’s repayment and borrowing to all credit bureaus every month so that there cannot be any kind of mismatch between scores offered by distinct credit bureaus. Credit score by all bureaus is equally valid by all banks. However, few may prioritise the credit report by a specific bureau. If you as a customer are unsatisfied with your score by any one of the bureaus, then you can cross-check with the other authorities to be sure. 

Both Equifax and CIBIL do not involve your investments and savings information or details. Your credit score provided by both credit bureaus are independent of all such savings involving savings account, fixed deposit, and all. Equifax permits you to avail a credit report four times in an annual year so that you can ensure to keep a thorough watch on your credibility and credit score. 

CIBIL, on the other hand, has plenty of clients as well as a partner as a financial institution with many than Equifax. However, there is a persistent misconception among many that the CIBIL score falls if checked constantly. Lenders check for CIBIL scores just if you place an application for a loan and if you feel the requirement, you can do this without any kind of fear. 

Credit reports offered by Equifax and CIBIL cannot be modified or edited without the effort of an individual. If you want to enhance your CIBIL score you need to be timely pay back your borrowings. In the case your credit report is incorrect, then only you can edit the same. However, for that, you must ensure to inform the agency as well as request to authenticate again. 

Read on to beware of the difference between CIBIL and Experian –

Yes, both CIBIL and Experian scores are equally important. Nonetheless, there are certain distinctions between them, like: 

CIBIL score has a slight edge over the Experian score – 

CIBIL scores are looked upon by lenders as superior to the credit score by Experian. Nearly 90 per cent of the Indian banks and financial institutions have tie-up with CIBIL.  

Every bureau follows a different proprietary algorithm for computation – 

Experian makes use of the FIFO algorithm for computing your credit score. On the other hand, CIBIL uses the model known as Empirica. 

CIBIL get higher preference by domestic money lenders – 

Distinct lending institutions and banks endow preference to CIBIL for distinct loans. CIBIL mostly caters to domestic money lenders. Presently, it has twenty-five banks and NBFCs under its fold. In contrast, Experian deals with various financial entities like MBNA, Morgan Stanley, HSBC, and Barclays. 

CIBIL has higher weightage – 

Being an Indian establishment, CIBIL enjoys a higher weightage than Experian. It is very common practice among financial institutions to make required checks on your credit score right before checking your Experian credit score. After taking a closer look at the parameters, they tend to settle down for the CIBIL score. 

Thus, it is important to maintain and update strong financial behaviour. It would ensure that you grab the best deal on various credit options. 

Experian has a good past – 

Experian was started in the year 1996. It was an outcome of the merger between TRW information systems & services and CCN group. CIBIL was founded in the year 2000 by the RBI. Subsequently, it partnered with popular Chicago-linked Transunion International Inc. Owing to such reasons, CIBIL is the most preferred credit bureau in India. 

Each of the bureaus differs in terms of the volumes of network and customer – 

CIBIL has a huge consumer base of over 1,000 million commercial entities as well as individuals under its network. It collects information via its 3 divisions, namely Commercial Bureau, Micro Finance Institution Bureau, and Consumer Bureau. When Experian was started in the year 1996, it received a license under CIC (credit information companies) Act.

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