CIBIL (Credit Information Bureau India Limited) and Equifax arecredit information companies that are authorized by the Reserve Bank of India.
These credit information companies collect and record the credit-related activities of customers across the country. Further, they process raw financial data to obtain credit scores and credit information reports. The credit scores obtained are in the form of numbers and they determine the creditworthiness of an individual or a company. This information is then providedto banks and other financial institutions in order to help them determine the credit risk of their customers.
Your credit score reflects your repayment capacity and spending habits. Therefore, financial institutions check your credit score when you apply for a loan. A good credit score can help you avail a higher loan amount at a reduced rate of interest. On the other hand, a poor credit history affects the chances of your loan approval. This is because lenders consider an applicant with a poor credit score as a high-risk applicant.
CIBIL was established in the year 2000 in India. The current shareholders of CIBIL are- Bank of India, IIFL, Aditya Birla Trustee Company, UBI, and TransUnion. Equifax was establishedin the year 2010. It is basically a joint venture of USA, Equifax.Inc and some financial institutions like State Bank of India, Union Bank of India and Bank of Baroda. Both CIBIL and Equifax have their headquarters in Mumbai.
The credit Score provided by CIBIL and Equifax ranges from 300 to 900. Usually, the Credit Score provided by both agencies isthe same. However, if it differs by more than 50 points for the same individual then the customer can obtain a copy of the Credit Information Report (CIR) and check the reports for any potential discrepancies.
The credit report can be obtained from Equifax at Rs.138. In case you need both credit score and the credit information report, then it will cost Rs.400. The payment for Equifax can be done only through demand draft.With CIBILyou can obtain the credit report that includes the CIBIL score at Rs. 550. CIBIL allows you to make the payment through net banking, debit cards, and credit cards too.
Both these credit information companies do not include your savings and investments. Therefore, your credit score obtained through CIBIL and Equifax are independent of all these savings including fixed deposits, savings account, etc. With the help of Equifax, you can get a Credit report 4 times in a year. On the other hand, you can obtain your credit report with CIBIL whenever you wish. This enables you to keep a check on your creditworthiness.
Since your credit score is a vital factor that decides your eligibility for a personal loan, it is essential to maintain a high credit score by making timely repayments and clearing outstanding dues. By improving your spending habits and managing your finances wisely, you can boost your credit score significantly over a period of time.
Lastly, it is to be noted that your credit score denotes the financial history of only past three years, not more than that