All You Need to Know about the Types of Credit Bureaus Present in India

When you apply for any type of loan, lenders look at your credit score, which is an important parameter that helps them determine whether to approve or reject your application. They partner with credit bureaus that provide this information in the form of your credit report. The following are the top four credit bureaus in India:

• Experian 

It is the first agency in the country to get a license under the new Credit Information Companies (Regulation) Act (CICRA), 2005. Experian provides credit reports and scores along with analytical tools and marketing services to enable its users to make informed decisions.

• TransUnion CIBIL

Founded in 2000, it is one of the most popular credit bureaus in the country. It collects and maintains credit-related data for over 1,000 million companies and individuals. The information is collated from three divisions to generate Credit Information Reports (CIRs) and CIBIL scores for individuals. The bureau also generates Commercial Reports and CIBIL Ranks for businesses.

• CRIF Highmark

Headquartered in Mumbai, this bureau claims to be the nation’s first full-service agency offering comprehensive information for all lending sectors, which include microfinance, Small and Medium Enterprises (SMEs), commercial, and retail borrowers. Its offerings include credit scores and reports, data management, analytics, insights, and software solutions to financial institutions.

• Equifax

It is a joint venture between Equifax Inc. and seven Indian financial institutions. The bureau collects individual and company-related information to provide CIRs and credit scores. Moreover, it runs a separate department that meets the lending and regulatory requirements of microfinance companies.

Every bureau is registered with the Reserve Bank of India (RBI) and uses its unique formula to calculate credit scores. Some of the factors considered to determine the score include the number of inquiries, type of loan, credit age, repayment history, and credit exposure. All banks and non-banking financial companies (NBFCs) provide the necessary information to the credit bureaus at periodic intervals.

A strong credit report helps individuals and businesses, especially SMEs, to avail of quick finance. Although the government has provided multiple benefits for SMEs in Budget 2021, they generally require working capital to fuel their business activities. Most financial institutions provide loans to these enterprises to ensure the owners have access to formal credit.

Mahindra Finance offers customized SME Loans to Indian SMEs. The lender has affordable SME loan interest rates and flexible tenures; ensuring borrowers have no difficulty in making repayments on time. The entire procedure is simple and can be quickly completed online. Moreover, the SME loan documents required are minimal.

Borrowers can apply for long-term credit to meet capital requirements or short-term loans from Mahindra Finance for their regular working capital needs. Visit the company’s website to know about the SME loan eligibility criteria and apply for a business loan to expand your business! 

Sandra Brookover