A bureau score, commonly referred to as a credit score, is a three-digit number that represents your creditworthiness. It ranges between 300 and 900, with higher scores indicating better credit health.
How is a bureau score calculated?
Your bureau score is calculated based on the following weighted metrics:
- Payment history (35%): Timely repayment of loans and credit card bills.
- Credit utilisation (30%): The percentage of available credit you are using.
- Credit history length (15%): The duration of your credit accounts.
- Credit mix (10%): A balanced combination of secured and unsecured loans.
- New credit inquiries (10%): The number of times you have applied for credit recently.
Each of these factors is analysed to create a score that reflects your financial reliability. A higher bureau score increases your chances of loan approvals and better interest rates.
What are the four credit bureaus in India: complete guide for borrowers
India has four major credit bureaus that collect financial data and calculate bureau scores:
1. CIBIL
- Function: Tracks credit history and provides credit scores ranging from 300 to 900.
- Purpose: Widely used by banks and financial institutions for loan approvals.
2. Experian
- Function: Offers credit reports and scores for individuals and businesses.
- Purpose: Helps lenders evaluate credit risk.
3. CRIF Highmark
- Function: Maintains credit records for individuals, MSMEs, and corporates.
- Purpose: Provides comprehensive credit reports and scores.
4. Equifax
- Function: Specialises in credit reporting and risk assessment.
- Purpose: Assists lenders with detailed credit insights.
Each bureau operates independently, but their reports and scores serve the same goal: helping lenders and borrowers make informed financial decisions.
Overview of the four credit bureaus in India and key highlights
Below is a comparison of the four credit bureaus in India:
| Credit Bureau | Year Established | Data Collection Methods | Key Services | Unique Features |
|---|
| CIBIL | 2000 | Banks, NBFCs, credit card issuers | Credit score, credit report | Most widely used in India |
| Experian | 2010 | Financial institutions, utility bill data | Credit score, fraud detection | Global presence and advanced analytics |
| CRIF Highmark | 2007 | MSMEs, corporates, banks | Credit reports, portfolio management | Focus on SME and microfinance data |
| Equifax | 2010 | Banks, financial institutions | Credit risk assessment, analytics | Comprehensive risk solutions |
Difference between CIBIL score and other bureau scores
While all credit bureaus provide a bureau score, there are some differences in their scoring methodologies:
- Scoring range: All bureaus in India use a score range of 300 to 900.
- Algorithm: Each bureau uses its proprietary algorithm to calculate scores.
- Data sources: Variations in data collection can lead to minor differences in scores.
- Usage: CIBIL scores are the most commonly used, but other bureaus also provide reliable credit assessments.
Understanding these differences can help you interpret your credit scores accurately and take steps to improve them.
How often lenders report your loans and cards to credit bureaus
Lenders typically report your credit data to bureaus on a monthly basis. This includes details about:
- Loan repayments.
- Credit card bill payments.
- New credit applications.
For instance, if you hold a Bajaj Finance EMI Network Card, your repayment behaviour is reported monthly to the credit bureaus. This ensures that your bureau score remains updated.
Why your bureau score matters for Bajaj Finserv loans and EMI card eligibility
Your bureau score plays a crucial role in determining your eligibility for Bajaj Finserv products, such as personal loans and the Bajaj Finance EMI Network Card. A higher score:
- Increases your chances of loan approval.
- Helps you secure better terms, such as lower interest rates.
- Enhances your pre-approved loan offers.
Maintaining a strong bureau score opens up more financial opportunities with Bajaj Finserv.
How to get a free credit bureau report and check your bureau score safely
You can access your free credit bureau report through the following methods:
- Bajaj Finserv portal/app:
- Log in to your Bajaj Finserv account.
- Navigate to the credit score section.
- Verify your identity via OTP.
- Download your free credit report.
- Third-party platforms: Ensure you use RBI-approved platforms for safety.
Always verify your identity securely and avoid sharing sensitive information on unverified websites.
How often should you use a free credit bureau check in a year
It is advisable to check your credit bureau score quarterly. This helps you:
- Monitor your financial health.
- Identify errors or discrepancies early.
- Plan corrective actions to improve your score.
Why your bureau score can be different across the four credit bureaus
Your bureau score may vary due to:
- Differences in reporting timelines by lenders.
- Variations in data collection methods.
- Unique algorithms used by each bureau.
These variations are normal and should not be a cause for concern unless the differences are significant.
