In one of my earlier blogs I mentioned about 'Credit Score'. The next question which comes up is who gives a 'Credit Score'.
Credit Score is given by Credit Bureaus who collect data from multiple institutions. Most of the time it is the data shared by financial institutions (banks, insurance companies, credit card companies) to these bureaus. In return the same institutions and others (landlords, utility companies, employers) ask for this information.
Every financial transaction regardless of its complexity (a simple application for a new credit card has an impact on the credit score) is reported by the participating financial institutions.
If you apply for too many loans or if you are not prompt in your loan repayments, your credit score reduces.
If you apply for too many loans or if you are not prompt in your loan repayments, your credit score reduces.
The most well-known credit bureaus are Equifax, Experian and TransUnion.
In India, CIBIL (Credit Bureau of India) was incorporated (in 2000) through the efforts of the Government of India and Reserve Bank of India (RBI). It took CIBIL sometime to setup the necessary infrastructure in place.
Financial Institutions in India have been using credit scores as one of the key inputs during the loan sanctioning process. As of now, only institutions have access to an individuals credit report. Starting December 2009, individuals are be able to get their credit scores from CIBIL directly on a payment of a service charge. A credit bureau only provides a score, it is the financial institution which decides how to differentiate customers based on the score. Credit Score only indicates the 'credit worthiness' of the individual. It serves as a predictor of consumer's future loan servicing ability. Lower the score, higher the risk.
Financial Institutions in India have been using credit scores as one of the key inputs during the loan sanctioning process. As of now, only institutions have access to an individuals credit report. Starting December 2009, individuals are be able to get their credit scores from CIBIL directly on a payment of a service charge. A credit bureau only provides a score, it is the financial institution which decides how to differentiate customers based on the score. Credit Score only indicates the 'credit worthiness' of the individual. It serves as a predictor of consumer's future loan servicing ability. Lower the score, higher the risk.
Now you can access your CIBIL credit score by accessing the link at https://www.cibil.com/d2c/accesscredit.htm
So watch your credit score (even if you are in India).
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