Will the rejection of a loan application affect my credit score?

A credit report contains credit information reported by financial institutions and banks. Consequently, any information regarded rejected loans or credit card applications is not highlighted in the report. However, you can enquire as to how many times your commercial credit report has been demanded by a bank or lender.

Can a customer's repayment record be overwritten in the database of the credit bureaus in India?

Financial institutions and bank send their customer data to the credit bureaus every month. In case a customer makes an outstanding payment in the current month, the same will be highlighted in the next report. However, the credit records for the previous months will continue to highlight the payment behaviour shown by the customer.

What information does a credit report include?

A credit report can include personal information, credit enquiries, current status of credit card and loan accounts information, historical information like closed credit accounts/defaults, etc. It however does not contain details of your life insurance , health insurance or even details of your investments like term deposits or bank accounts.

Does my CIBIL report highlight the details of other loans or credit cards I availed from other banks?

A CIBIL report displays all the current and previous loans or credit cards you have availed with various banks. Additionally, the CIBIL credit report also contains details of inquiries made by prospective lenders in reference to request for new credit made by you.

What is to be done if I observe some inaccuracy in the credit report?

If you observe some inaccuracy in the credit report, you must report it to the credit bureau and the financial institution you have availed of your loans. Once the inaccuracy has been established by the financial institution, only then the credit bureaus can rectify it.

The Role and Functions of Credit Bureaus in India

1. TransUnion Credit Information Bureau (India) Ltd. (CIBIL)

The CIBIL credit bureau was established in 2000 and is India’s oldest credit bureau. The bureau maintains the credit record of over 600 million individuals and 32 million companies. It was first established by the Reserve Bank of India; however, later, it merged with TransUnion International, a Chicago-based credit bureau.

2. Equifax India

Equifax India is the Indian arm of Equifax Inc., which happens to be the world's most renowned credit bureau across the globe. Although established in 1899, the bureau received a license to operate in 2010. Besides providing credit reports, the bureau calculates risk and portfolio scores.

3. CRIF High Mark

After being established in 2007, the credit bureau obtained a license to operate in 2010. The bureau claims to be India's first full-service credit bureau. It provides a number of financial services, including providing comprehensive credit information to lenders, MSMEs, and commercial and retail customers. Along with it, the bureau also offers data management, analytics and insights and software solutions to NBFCs, housing finance companies, insurance companies, and telecom service providers.

4. Experian

The credit bureau was the first to be accredited under the 2005 Act of New Credit Information Companies (Regulatory). The credit bureau provides credit reports and credit scores. Along with that, they also offer marketing services and analytics tools to support businesses and individuals to take well-thought credit decisions.

The Role of Credit Bureaus in India

As established before, a credit bureau is an agency that accumulates and examines the credit information of a person or business. This financial information can include income tax refunds & payments, utility bills or credit loans taken. Such information is sourced from lending institutions, and data collection agencies, among others.

The objective behind the collection and analysis of this information is to determine the credit behaviour of individuals. The Credit Information Companies (CICs) or credit bureaus in India are licensed by the Reserve Bank of India (RBI), which regulates these bureaus to restrain any malpractice.

Here's a brief of a credit bureau's role in India:

The objective of credit bureaus is to maintain financial transparency. This includes providing better access to financial records to lenders and individuals through an elaborate credit bureau report. In addition to this, the liberty to file disputes and complaints against any financial disparities.
Another important function of the credit bureau in India is to prevent bad loans and fraud. A credit bureau determines an individual's credit score, which ultimately helps lenders decide if a particular candidate is credit-worthy or not. Any bad financial behaviour in the past would label the candidate as risky, thereby preventing bad debts and fraud in the future.
Consequently, efficient credit reporting systems in India can mitigate a number of market risks or failures that are prevalent in financial markets in India
Credit bureaus collaborate with multiple lending institutions and creditors to help them taking several lending decisions.

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Credit Bureaus in India

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List of Credit Bureaus in India