If you’ve borrowed a loan before, or own a credit card in India, then the credit bureaus authorised to operate in the country have access to your credit history.
In India, there are 4 credit information companies (CICs) that compile and assess individual and company credit reports, also known as bureau reports. CIBIL and Experian are two credit bureaus commonly used by banks and NBFCs to check your credit history before they lend to you. But are your CIBIL and Experian credit scores different or the same? Let’s find out!
What is TransUnion CIBIL Limited?
TransUnion CIBIL Limited, part of TransUnion, is one of the most widely used credit bureaus in India.
They maintain credit files on approximately 600 million individuals and 32 million businesses in India and prepare credit reports for both consumers and corporations.
CIBIL introduced the CIBIL Score, India’s first generic risk scoring model, in 2007. It uses a borrower’s credit history to assess the risk involved in lending to them. Since then, the CIBIL score has been used by lenders to assess a borrowers’ ability to handle debt and repay their loans.
All major Indian lenders, housing finance companies, and financial institutions are members of CIBIL. So, almost all lenders use the CIBIL credit report to assess the creditworthiness of their customers before lending to them.
What is Experian?
Experian is a global credit rating agency that offers its services in 44 countries, and it has helped lenders make 3.5 billion credit decisions so far.
In addition to credit scoring, Experian also offers its customers business tools like Market Switch and Powercurve Origination to help them analyse the score even further, allowing them to make more informed business decisions.
Experian became a licensed credit bureau in India in 2010. Since then, their services have helped lenders make millions of lending decisions and assisted in reducing fraud and identity theft in India.
Will my CIBIL and Experian credit scores be different when I apply for a business loan?
Yes, when you apply for a business loan, your CIBIL and Experian credit scores will be different.
This is because even though both companies are credit companies and both develop credit reports and assessments for borrowers, they both use unique algorithms to calculate your credit score. Both CIBIL and Experian have their own unique filters and factors that are a part of their scoring algorithms. In total, credit companies use hundreds of different data points to inform and create your credit report and credit score.
So, if your Experian credit score is 670, for example, your CIBIL score does not have to be the same. But the good news is lenders do not check both your CIBIL and Experian credit reports when you apply for a business loan. They will use one of two reports or may check your credit report from another credit bureau, like CRIF Highmark or Equifax, to check your credit history. Which report they use depends on which credit company is their partner bureau.
Having a high credit score improves your chances of getting the business loan you need to grow, with favourable loan terms. A score of 750 or above is considered a good credit score.
Does CreditEnable check my credit score before getting me a business loan?
When you apply for a business loan using CreditEnable’s technology platform, we do a soft pull of your Experian credit report. Our lender partners prefer to lend to businesses with a credit score of 750 and above.
Experian generates individual and business credit reports instantly, using their advanced technology and credit assessment tools, based on the information they receive from lenders.
Since our mission is to help SMEs easily get business funding, the soft pull protects your score. A soft pull of your credit report has no negative impact on your credit score as it is not tied to a credit application. It allows us to check whether you are eligible to get a business loan from one of our 25+ lender partners and give you helpful advice on how you can improve your score in the future if you are not eligible for a business loan right now. We also send you a copy of your Experian credit report so you know what your credit profile looks like, and you can check it for any errors as well.
Business Loans. Enabled Simply.