In conclusion, while building a credit history is important, it is equally important to maintain a healthy credit score. Keep in mind, however, that you may be subject to much harsher terms and conditions on your loan or credit card. It may still be possible for lenders to give you a loan, provided your score is not abysmal. Having a low credit score, however, is not the end of the world. The higher your score, the better the interest rate you will be offered as the lender is reassured that you will repay your loan obligations. If you fulfill this basic criteria of creditworthiness, then your score is also used to determine what type of loan you are eligible for and what interest rates you will be charged. When applying for a loan or credit card, the first thing lenders do is to check your credit score and credit report to see if you qualify for new credit. Lenders use your credit score to evaluate if you qualify for a loan and if so, to determine the terms and conditions of the loan including the interest rate, loan amount and tenure. Banks, credit card companies and other lenders would be reluctant to approve credit to individuals with a low score as they are nervous about the potential for repeated defaults on payments.Ī credit score is a quick indicator if an individual has a good record of repaying their debt obligations. If you have a high score, you stand a good chance of being approved for a loan, and the loan approval process will be quicker, smoother and easier.Ī low score (less than 650) indicates a high-risk customer with a high probability of defaulting on debt obligations. Nearly 80% of all loans that are sanctioned are to customers holding a credit score of 750 or above. In general, a score of 750 or above is seen as a good score. You can fill in the form with the necessary personal details required for authentication and submit it online. You can file a dispute online at the CIBIL™ website. It can take 30-45 days for the error to be resolved and to show on your credit report.
Sometimes, an error can also be a sign of fraud or ID theft, so it is important to file a dispute with the concerned bureau immediately to get the error rectified.īoth Equifax and CIBIL™ have a simple process for filing a dispute on your CIR or credit report. An error could occur when the lender is reporting the information, or when the bureau is recording the information, or when you provide personal details. If you notice a variation of more than 50 points in your credit score from the two credit scores, you can obtain a copy of your Credit information Report (CIR) and check the reports for any potential discrepancies. Lenders too are aware of the scoring model of each of the bureaus and will factor these in when evaluating your credit score from each bureau.
Each bureau will have its own weightage for different parameters leading to differences in the final score. However, do keep in mind that there may be differences in the exact score between the two bureaus for the same customer, though it may not be significant. Both Equifax and CIBIL™ credit scores are in the same range. The RBI requires all banks and lending institutions to report all credit-related customer transactions to all the bureaus, so there is no difference in the information currently received by any of the credit rating agencies for each individual customer.Ī credit score is typically a 3 digit number between 300 and 900. The CIBIL™ score might be more well-known because CIBIL™ has been in operation for a longer time and has many more years of historical data. However, the credit scores issue by Equifax and CIBIL™ and the other two companies all have the same validity. The credit scores issued by all the bureaus are equally valid though some lenders might have their own preferences. Validity of the scores from the different credit bureaus : (an American credit services company), Aditya Birla Trustee Company, Bank of India, IIFL, UBI, IOB and India Alternatives Private Equity Fund. The current shareholders include Trans Union International Inc. It was established in India in 2010 and is headquartered in Mumbai.ĬIBIL™ was set up in India in 2000. Equifax is a joint venture between Equifax Inc., USA and seven leading Indian financial institutions - State Bank of India, Bank of Baroda, Bank of India, Kotak Mahindra Prime Limited, Religare Finvest Limited, Sundaram Finance Limited and Union Bank of India.
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