Why does the credit score differ between credit bureau?

What is a credit bureau? How does that work? Does that affect my day-to-day life? We are here to give you a proper insight on credit bureaus and their different styles of credit score ratings.

When you apply for a loan, the bank or the non-banking financial firm will try to pull up your credit report. The credit report will have all that is needed to understand you’re past financial history, your current debts. By having a thorough research on the same the bank then considers giving you a loan or any financial product like a credit card. But from where do the banks get the credit report?

There are four major credit bureaus in India; they are Equifax, CIBIL, Experian and Highmark. Majority of banks and Non-banking financial companies in India take assistance of CIBIL in terms of credit report of the customer.

CIBIL was established in the year 2000, Equifax, Experian and Highmark was granted a license in the year 2010 to enter Indian market and help with the credit rating system.

The scoring styles used by all these bureaus are different as they practice differently and do not want to collude with other bureaus.

 The Scoring System

CIBIL- the score ranges from 300 to 900, 300 being the lowest and 900 being the best. You can opt for a free cibil score from various Internet websites, but if you want a detailed report it will cost you INR 500.  It is not necessary to have a perfect 900 to get the loans sanctioned, every bank have their own protocols and you can avail a loan with a low CIBIL score as well but with a high interest rate. You can get the report within 7 working days once applied.

EQUIFAX- Equifax has a different approach when it comes to scores. Their score ranges from 1 to 999, on that 1 being the lowest and 999 being the highest, they more incline on the corporate side rather than individuals, the major services provided by them are Credit risk and fraud, industry diagnostics, etc. They take 10 days to generate the report. You can get it for INR 400.

EXPERIAN- Experian credit ranges just like CIBIL that is between 300 and 900, 900 being the highest and 300 the lowest. Experian on the other hand and more inclined to collection and money recovery, data analysis and customer acquisition. Usually they take 20 days, but with you a speedy process you can get it within 15 days. This will cost you INR 399 + Taxes.

HIGHMARK- the credit range in case of Highmark is a bit complicated, the score ranges from 300 to 850, but the scores are considered poor, if they are below 640 and are excellent when above 720. They specialize in verification, credit assist, data quality management etc.

The reserve bank of India has mandated all the financial institutions to access the credit scores to analyze if the individual is credit worthy.

You can increase your cibil score by fair practicing, pay your bills on time, do not hand on bad debts. With the perfect CIBIL score you can avail a lot of financial benefits, these credit bureaus also help you analyze how you could improve your credit scores. It only used to happen when credit report is used to determine loans, but now we are taking steps towards using it for every little transactions some sited like,

Screening for postpaid SIM card connections, Credit reports for online sellers, fixing insurance premiums, using the report to analyze prospective tenants, etc.

The credit score awareness is less among Indian people, hence they lack in credit discipline. Many people are unaware of the poor credit score and are denied loans. The bureaus play a vital role for banks for determining the credit worthiness of an individual.

How lenders estimate credit for mortgage loan requests?

Are you facing a financial crunch? Are you in need of urgent funding? You may approach a bank with a mortgage loan request.

Financial crisis is a very common problem. Your existing property can however take care of your crisis. A mortgage loan helps you to raise funds to meet financial shortage. This is a Secured Loan in which you keep your immovable property (home) as a deposit and take money from the lender. The borrower needs to repay the loan via regular monthly installments within a particular period of time.

But before you do that, you must know how lenders estimate credit for mortgage loan requests.

Mortgage Loan Eligibility   

Both salaried as well as self-Employed individuals can apply for a Mortgage Loan.

To avail a mortgage credit, you need to carry out certain minimum eligibility conditions. The following are some of the factors considered by the lenders while determining your eligibility for a mortgage loan:

  • Minimum age: You should be minimum of 21 years of age at the time of the loan application.
  • Annual income: What income is required to qualify for a mortgage loan depends on the lender.
  • Existing liabilities (if any): Your monthly liabilities are taken into consideration (say living expenses, other EMIs and bills)
  • The valuation of your property (to be mortgaged): The lender generally approves 80% of the registered value of your property as the loan.
  • Number of dependents: If you are responsible for the livelihood or upkeep of some members in the family; they are your dependents (spouse, kids, and parents).
  • Total work experience and stability in current job: How long you have been in the current organization or business, your qualification definitely play a vital role in assessing your loan eligibility. Lenders prefer stability of job and prefer those who are employed for at least two years.
  • Proper financial documents: You should have proper and relevant financial documents (pay slips, ITR, bank statements) to avail the loan.

Basically after gathering information about your income and debts the lender assesses your credit profile. They determine how much you could afford to borrow. Before prequalifying, they adjudge your ability and willingness to repay the loan.

For ability check, the emphasis is put on your income and job stability. However to check willingness to repay they would ask you the purpose of property use. They would check your credit report to closely study your previous history of meeting any such commitments.

Your credit report speaks volumes about your credit repayment history. Looking into your report if the lender finds the report is plagued with derogatory remarks and red flags, it might reject the loan application. The red flags indicate that you didn’t make timely payment of loans in the past or settled with the bank (that is again did not pay in full). In case there is any delinquency, then a valid reason for the same has to be given with proper evidences. All in all, low CIBIL score literally could scupper your mortgage application.

You are usually entitled to get a Loan Against Property (LAP) up to 80% of the registered value depending on your repayment capacity. It is important to keep in mind that every bank has its own set policy to evaluate your property and assess the borrower’s eligibility to repay the loan.

If you have a good monthly in-hand and you are not servicing any other loan, you are eligible to get 60 times your monthly net income as a loan. However if you seek bigger amount you can use home equity to raise the funds.

So whether you are looking for additional funds to meet educational expenses, marriage expenses, medical expenses or even business reasons you need not worry! If you have a property in your name you can use LAP from any of the banks such as HDFC home loan and meet the financial obligations.

It is important to understand here that there are no fixed rules to estimate the eligibility for mortgage. Each lender would consider an application on individual basis.

Being a borrower however you should do a proper homework and know the amount of loan you seek. You should negotiate as much as possible on loan duration and rate of interest. You should ask the lender if there are any prepayment charges. With a home equity at stake you should not leave any stone unturned to ensure the affordability of the loan.

The Bad Credit Score Survival Advice

A red flag in the credit information report is like a fire in the jungle. You do not know how much damage it would make until it eases off. Surviving bad score is thus not easy. A lot of people might share the tricks of restoring credit score however the truth is, it is easier said than done.

Once ruined it would at least take six months to rebound the low CIBIL score. Many a times the damage stays on your report for years to come. All you can do is pacify the bad history with good history.

Let’s find out how you can cope with bad score and roll over the financial dice in your favor once again.

Seek professional advice on bad credit score survival.
After you come to know about your low score, the first step should be to seek a professional help. When you contact a Credit Improvement Agency, it would assess your credit report and guide accordingly the ways to improve the score.

If however you choose to do it yourself, go for free CIBIL check online and study your report. It will help you understand the gravity of the problem. After studying the report, if you find any errors eliminate them without a delay.

Make a budget and organize your finances
With bad score, your credit worthiness is hurt very badly. You need to take charge of financial conditional and analyze your expenses and incomes. Calculate your net income and know how much you actually have in hands to pay out the debts and installments. You should try to close the expensive cards and accounts first and try to save as much as possible.

Not to mention, you should try to add as much income avenues as possible and try to have some surplus every month. Your sole aim should be to become take your debt utilization ratio to 30% of the limit being granted to you.

Contact your creditors and make a repayment plan
When you have too many debts to manage, you should consider contacting your creditors in a hope to find an option to survive the bad account. Speaking with your lenders may help you find a middle path with lowered interest rate or a new repayment plan.

Raise additional loans to pay off loans / credit cards
After you limit the pressure of debts by closing expensive cards and refinancing of the loans, consider applying for new secured loan to survive the bad credit. You can use the amount to manage your finances and repay diligently all the installments. This would build a good history and gradually improve the score.

Use a co-signor or guarantor to avail low interest loan
When you have bad credit score with red flags in the credit report, it is unlikely that banks would offer you loans at low rate. With bad score you become a risky prospect for the bank and they want to lend only with a certain degree of security. Besides rejection of a loan application further ruins the score. Keeping both the facts in view, you should apply for loans with a co-signor or guarantor.

You can ask your friend, spouse or blood relative with high credit score to become a co applicant or guarantor for you. This would raise the chances of loan approval and that too at normal interest rate.

Use a high worth asset as collateral
With bad CIBIL score each unplanned financial activity would hurt your score further. Besides loan repayment and credit utilization ratio, the mix of loans and length of loans also affect your score. If you have home equity or other high value assets such as Gold, you can use these assets as collateral and raise a secured loan.

Consolidate your debt
When you have too many debts to pay and manage every month, you can consider consolidating them into a big umbrella loan that helps you close all accounts into one. You can consolidate loans as a long term personal loan using your home as collateral. The goal of consolidating loans is to make your monthly repayment affordable and save some surplus every month.

Rent a home/property
Last but not the least you can consider renting your home or part of your home to raise some extra funds and save some amount every month.

Using all these steps you can gradually improve your credit health.

Mistakes to be avoided when trying to improve CIBIL score

A credit score is something that reflects your credit history and thus it is something that cannot be built or destroyed in haste. A lot of factors contribute in making or breaking your credit rating. Being a responsible borrower is the simplest way to having a good cibil score; but if you have not done that then you will have to work on trying to get a better score. While there are certain things that can help you build your score, there are some other aspects that can pull it down. So here is a look at few things to avoid if you are looking at improving your score.

  • Excessive Use of Credit Card: Credit cards are a great convenience but their use may often be criticized as one can easily go overboard and regret it later. However one may think that if they manage to pay their full dues on time the credit card usage will never cause a problem, but this notion is wrong. Using your card judiciously is important if you are looking at improving your score. This means that you need to limit your credit card expenditure per cycle to 40% or less of the sanctioned cared limit. This is known as credit utilization ratio and this needs to be calculated per card wise as well as for all cards put together in case of multiple cards. High credit utilization can harm the score as the user appears to be credit hungry.
  • Making too Many Inquiries: When you apply for a loan, the lender seeks your CIR from the credit agency which is known as a hard inquiry. Each hard inquiry is recorded in the CIR and impacts the score negatively. Thus if you truly require a loan then make sure you research well before you actually apply for a loan. This will ensure that your loan application is not rejected which will eliminate the need to apply for a loan elsewhere. So for example if you want to buy a new car and need a loan for it, then carefully research about car loans Check which lender offers loans at what rates, what is the LTV ratio, what are the documents required, at what credit score they are willing to offer loans and so on. You should then approach a lender who you know meets your requirements and who will be willing to lend to you based on your rating and profile. Refrain from making unnecessary enquiries.
  • Settling an Account: Consider an example to understand this aspect. Priya is looking at improving her credit score so that she can apply for a home loan next year. She goes through her CIR and spots an old credit card debt; she decides to take care with an aim of improving her score. She got in touch with the credit card company and she paid the dues after some negotiation. Hoping to see her score improve she got her CIR but was dismayed that it had reduced further. If you are as confused as Priya that why did this happen then we have an explanation. When you pay old dues then the fate of your score depends on how this repayment is reported. If the account is reported as settled then it could mean trouble as it will raise a question mark in the minds of all future lenders about getting their money back in full. If the debt is reported as simply being paid then it will have an opposite impact.  
  • Guaranteeing a loan without thinking: Sometimes an applicant may find it difficult to get a loan on his/her own due to lack of proper documents, low score, not meeting the eligibility criteria and so on. In such a scenario they may ask someone to guarantee their loan. Well this can definitely ease out the problems for the person seeking the loan but may cause the guarantor to land in a tricky position without realizing so. If the applicant fails to pay his/her dues on time then the guarantor may be asked to do soon. What’s more each delayed payment can harm the score of the guarantor as well. So though you may be servicing all your loans on time you score may still be low because of a loan you guaranteed. Thus if you plan to guarantee a loan, do it after being sure about the applicant, you own ability to service it in case the applicant fails to so and also after you are sure about its impact on your own credit score.

Often small things can cause your score to dip. Thus make sure you steer clear from the above mistakes if you want to be credit healthy.

 

Is all the hype on credit score justified?

If one had applied for a loan a decade or so back, they would have required the relevant documents, knowing the bank manager or knowing somebody who knew the bank manager and could “introduce” the applicant. Knowing the manager or being introduced to the manager ensured that the lender knew about you being a reliable borrower or a trustworthy person which could not be established by simply looking at the documents. Lenders want to give money to those who can be trusted and this judgment was made in a subjective way in the past and often backfired. Things in today’s times have changed; now this “trustworthiness” or “creditworthiness” can be established in a more objective way; with the help of the credit score.

So What is a Credit Score?

Before focusing on the hype that surround the credit score and if it is justified or not we will try and understand what the credit score is. The credit score is a three digit number that reflects the creditworthiness and also the credit health of the individual. This rating is calculated based on the credit history of the individual; this history must be at least six months old and includes various aspects related to loans, credit cards and other credit behavior.

Based on five main parameters that are namely the repayment history, credit mix, credit utilization, inquiries and loan tenure the credit score is calculated. Amongst the five the repayment history is the most important parameter followed by credit utilization. These aspects are used to arrive at the credit score of the individual. The Credit Information Report which is a detailed contains a lot of information related to loans and the individual apart from the credit score.

Why is it Important?

So now we know how the score is calculated. So, why is it important? The score is important as it lets the prospective lender judge if the prospective borrower can be trusted or not. Let us start from the beginning. When an applicant applies for a loan, he/she submits an application along with the required documents. A financial institute will get hundreds of applications, they want to be sure that they lend the money to the right candidate, a person who can be trusted and is credit worthy. So how do they do this? This cannot be judged by simply look at the documents and the application form. This is what brings us to the credit rating.

The prospective lender will ask for the CIR of the applicant and based on the CIR the lender will decide whether to go on to the next step or not. The score is calculated based on the past credit behavior of an individual, thus the lender can make an assessment whether a person is likely to be a responsible borrower or not or is likely to default based on his past behavior and his current debt obligations.

Each financial institution will have its own set of rules and requirements when it comes to accepting a loan application or not. One of the criterions that the applicant has to comply with also concerns the credit rating of an individual. Thus those who have a score that is less than what is acceptable to the lender will not be sanctioned a loan, their application is likely to be rejected at the first step only. The acceptable credit score varies not only with the lender but also may differ depending on the loan type.

Generally a score of 750 is considered to be good enough to get a loan sanctioned. As per the statistics by CIBIL 79% of all loans sanctioned are to those people who have a score of 750 plus. If you are looking for a loan and have a score below this, it is a good idea to improve CIBIL score before you apply for a loan.

So is thy Hype Justified……

To clarify CIBIL or any other rating agency does not specify who should be given a loan or not, they just collect the data from various lenders and arrive at a score based on it. However, having said that almost all lenders look at an individual’s credit score before deciding whether to lend to him/her or not. Thus getting a loan or a credit card is heavily dependent on a healthy credit rating else your chances of getting a loan approved go down. Even if one were to get a loan with a low score it would be at higher interest rates. So yes the credit score is important and one must focus on keeping it healthy, not for the hype but for your own sake.

 

5 Ways to Build Your Credit Score from Scratch

It can be a terrifying experience to find out that your loan application was rejected due to the absence of a credit score. However, there is no reason to be alarmed as there are many people who don’t have a credit score for many reasons. If your credit history is blank, then you can build a good one in many simple ways.

The following are 5 good ways to build your credit score from scratch:

  1. Joint Account Holder

The easiest way to build a credit score to become a joint account holder with a person who already has a credit history. However, you must choose your partner carefully.

You would want someone who you trust, and who trusts you too.  This is because your credit history will be based on the kind of credit history they have as well. So, if they have a good CIBIL rating and a good history of timely payments, then your credit score will also increase. Similarly, if they tend to delay EMI payments, etc. then your will have low CIBIL score.

If you want a home loan on an urgent basis but don’t have a good credit score, or have no score at all, then becoming a joint holder is one of the best options for you. This is because the lenders generally don’t consider passing a loan “risky” then there is a joint account holder involved who has a promising credit history.

  1. Becoming Authorized User

It is not always possible to convince someone to become a joint-account holder with you. In that case, they might at least make you an authorized user.

While being an authorized user you don’t share any financial responsibility with the account holder and server only as a signer you can still get credit building advantages. The only problem with this method, however, that you may not see the results, at least for a long time. So, if you want to build credit score fast then becoming a joint account holder is a better option.

  1. Getting a Credit Card

Getting a credit card and using it wisely is another excellent and simple way to build your credit score. Since most banks love to push credit card usage anyway, it won’t be hard for you to get one for yourself. However, the real work begins when you get to spending. Here are a few things to keep in mind when you use your credit card:

  • Credit Utilization: No matter what the limit on your credit card is you must spend it wisely. Ideally, you shouldn’t spend more than 30% of the credit limit. Thus, if the credit limit is Rs. 1 lakh then you should cap your monthly expenses with the credit card to a maximum of Rs. 30,000.
  • Timely Payments: Believe it or not, timely payments are extremely important to build a healthy credit score. If a potential lender performs a credit check and finds a history of delayed payments, then it is easily possible that they will reject your loan application. Similarly, if they see a history of payments done on time then they will feel confidence in your creditworthiness and it will be easier for them to sanction a loan.
  1. Personal Loans

Personal loans are tricky to get especially when you don’t have a credit score. However, you still have a good chance to get a small personal loan. In fact, if you could manage a personal loan along with a credit card then you can get the desired results faster as a mix of different credit forms (loans and credit cards) can give an impetus to the credit score.

  1. Monitoring Your Credit Report

You can easily find your CIBIL rating online. Most of the credit bureaus of India allow the users to download their credit report for a nominal fee. If checking your credit report you find that there are some errors or discrepancies, then you can have them corrected and see an improvement in your score.

Credit building is a long-term process. Unless you already have a credit score it can be difficult to build one, and not to mention the time and effort it demands. That being said, if you can find someone who has some experience in this area then you can succeed in the endeavor easily and faster.

What you must do if there are errors on your credit report

Financial advisors always suggest that one must review the credit report periodically. The information in the credit report has a direct impact on your credit score. It determines whether you can get loans in future and how much interest you need to pay. Hence it is imperative to make sure that the data in the report is accurate, complete and up to date. A periodic check also helps guard against identity theft. You can quickly find out if someone uses your personal information to commit fraud.

How can errors crop up and what kind of errors should I look for?

Banks and financial institutions hold all the data pertaining to your credit card and loan accounts. They keep track of your payments and pass on the data to the credit bureau. If the information passed on is inaccurate then there might be errors in the credit report. Mistakes in data entry or time lag between data collection, submission and updation of details can lead to discrepancies. These can relate to your personal details for example misspelt name, wrong date of birth, PAN number etc. There may also be mistakes in the balance amount, account status or payment details. More serious errors include inclusion of credit card or loan accounts that you have not taken.

What to do if there is inaccurate information in the credit report?

However trivial or serious an error maybe, you should get it corrected to prevent any negative impact on the credit score. CIBIL has a dispute redressal mechanism through which you can report the discrepancy and get the mistakes corrected.

Fill a dispute resolution form

The first thing that you need to do is to file a dispute by submitting an online dispute form available at the CIBIL’s website. You need to furnish your personal details, the nature of the error and a brief description of the error in the online form. You are also required to fill in a control number. This is a unique 9 digit number that you can find on your CIBIL report. This number aids CIBIL in identifying the report for which CIBIL dispute is raised. Once a dispute is raised you will receive an email mentioning the dispute ID that can be used for future correspondences.

Verification of information

CIBIL contacts the concerned financial institution to verify whether the dispute is legitimate or not. Only after the credit institution gets back to CIBIL with the relevant facts and authenticates the dispute, will CIBIL go ahead and rectify the errors. CIBIL is not authorized to make any changes to the Credit report without proper verification. Only when the loan provider confirms the error CIBIL will update the records with the correct data. You will keep getting email notifications regarding the status of your request. When the dispute gets resolved you will be notified accordingly. CIBIL usually takes 30-40 days to resolve any dispute depending on the time the credit institution takes to revert back with the required information.

If the mistakes in the credit report relate to personal details or incorrect overdue amount then the resolution happens faster.  But in case you find entries of loans or credit card accounts that don’t belong to you, then it is a case of mistaken identity and it may take a little longer to resolve the issue. The law requires the bureau to come up with a formal resolution of dispute within 45 days of the dispute being raised. Once you get the resolution you can apply for the report again to see whether the changes got reflected.

In case you are not satisfied with the resolution provided you can approach the bureau again and initiate a fresh complaint. The information will be re-verified with the bank. Usually CIBIL provides a satisfactory resolution but it takes time to verify and correct the errors. So you need to be patient during the entire process.

 

CIBIL report is increasingly gaining importance. It is prudent to reflect upon it if you wish to have a smooth loan application process. You should check the report at least once every year. If you haven’t done it till now, make sure you do it at least 3-4 months before you wish to apply for any loan. In case you uncover any errors you will have sufficient time to get them rectified.

Be mindful that the errors can lead to depleting your credit score and you may be left with little options but to look for bad credit fix and apply for personal loan with low CIBIL score.

Is it Possible to Have a CIBIL Score Higher than 850?

If you are a smart credit user then you probably have a decent credit score already.  However, do you know how high it has to be to be considered good by a lending institution? A score higher than 750 is considered good by lending institutions, but the maximum you can get is 900, which is the limit. So, this begs the question- can you get a perfect 900 score, or at least higher than 850? The answer is “yes”. If you are willing to go to great lengths for scoring higher than 850 then you can certainly succeed in the endeavour.

Here are some of the things you must do to get a super high CIBIL score:

  1. Lowering Your Credit Utilization

High credit utilization has a direct affect on your score. Even if you have been paying your credit card bills on time, and making regular EMI payments, excess of credit usage can be detrimental for your CIBIL rating.

To get a perfect or near-perfect score you must cap your credit utilization at 30%-40%. If your credit requirement is high then you can also ask your lender to increase your overall credit limit so you can spend the same amount of money every month, but enjoy the benefit of lower credit utilization ratio.

  1. Automating the Repayments

If you want to improve CIBIL score and create an impressive credit report then paying your EMIs and credit card bills on time is a must. There is no workaround for it.

Since even a single late payment can hurt your credit score, it is best to not take any chances. So, one thing you can do is make an arrangement with your bank and have them set automated repayments. With this your EMIs and credit card payments will be deducted from your account automatically every month.

  1. Length of the Credit History

The longer is your credit history, the higher will your score. This is because a person will shorter credit history has a risky profile, and can’t be trusted by a bank easily. So, if you have several credit cards under your name and you have to cancel one out of them all, then choose the one that was issued most recently. If you will cancel an old credit card it could affect your score negatively.

  1. Being Careful When Applying for a New Loan

If you are planning to get a new home loan, personal loan, etc. then make sure that there is a gap of at least six months since your last loan application. When you apply for loans or credit cards frequently then lenders can consider this as a credit hungry behaviour and report it to CIBIL. This can hurt you score to a great extent.

  1. Checking Your Report Frequently

Are you trying your best to improve your credit score but are not observing any improvement? Maybe the problem is not with your efforts, but with your report itself. Many times credit users get a bad CIBIL rating because of errors or mistakes in their credit reports.

You can get a free credit report online to get an idea of where you stand. If you are not satisfied with the rating, you can apply for the actual CIBIL report by creating an account on the official website. If you find any discrepancies or mistakes in the report, you can intimate your bank about the same. They will inform CIBIL, which will make the changes accordingly. You should be able to see the improved rating within 30 to 45 days.

When it comes to credit score, you shouldn’t ever get comfortable. Financial institutions are becoming more and more stringent with their application procedures. More than that, a high credit score is also slowly becoming a part of the eligibility criteria for getting a job. Thus, you should always strive to improve your score no matter where you stand. Even if your score is higher than 750 (which is considered satisfactory), you can always improve it. With an excellent score you can get a loan or a credit card easily in the future. Plus, you can also enjoy low interest rates as well.

 

How Can a Free Credit Report Help Indian Credit Users?

Are you planning to get a loan? If your answer is “yes”, then maybe you should take a look at your credit report first. You will be surprised to know how many loans get rejected on the account of a poor credit score.

There are countless Indian citizens who use credit cards, or have a loan under their name, but few realize the importance of their credit rating, which is affected by their credit behaviour. The following are the major credit bureaus of India that provide standard credit reports to the banks for consideration. If you have ever applied for a loan or a credit card, then be sure that your bank obtained your credit report from one of the following credit bureaus:

  1. Credit Information Bureau India Limited(CIBIL)

CIBIL is the most popular credit bureaus of India that the majority of lending institutions are associated with. It was the first credit bureau of India, and had recently partnered with TransUnion, which itself is one of the world’s most reputed credit rating and analytics companies.

CIBIL works along with TransUnion to provide credit reports of Indian citizens to private and government banks, along with other NBFCs. A CIBIL score ranges from 300-900, and is based on your credit usage, and repayment history.

  1. CRIF High Mark

CRIF High Mark is another highly recognized credit bureau of India that calculates credit score on the scale of 300-900, just like CIBIL. While the company is one of the top finance companies in the continental Europe, in India also the company has quite a reputation for its credit calculation and analytics standards.

You can obtain your CRIF High Mark score online for a modest fee.

  1. Equifax

Equifax is a US-based company that specializes in solutions for consumer, commercial, and workforce domains. In India the company works under the name ECIS, which stands for Equifax Credit Information Services Private Limited. It was renamed as the company collaborated with other financial institutions, namely Religare Finvest Limited, Sundaram Finance Limited, Union Bank of India, etc.  Just like other credit bureaus, you can get a copy of your credit report from ECIS online.

  1. Experian

Experian India is a fully owned subsidiary of Dublin, an Ireland-based Experian LLC, and operates as Experian Credit Information Company of India Private Limited. One of the reasons why Experian stands out from other credit information companies, is its proprietary statistical algorithm. This is why your credit score provided by Experian could be quite different than the one provided by other credit bureaus.

All the four major credit bureaus of India charge a certain fee for providing your credit report. However, there is a thing called “free credit report India” too. There are several websites that can calculate your approximate credit score by analyzing your payment history, credit usage, and some other factors that affect your score. While this leaves some room for error, you can certainly get a general idea of where you stand with your creditworthiness.

Here are a few ways a free credit report can be helpful to you:

  • Credit Health: A free credit report allows you to understand your credit health in a simple manner. The standard credit report can be quite complex for an average person to understand, but free credit report is simple and intuitive. Without going into unnecessary details it simply highlights what’s relevant to you.
  • Analytics: With a free credit report you can track your payment history, and your current stand with loan and credit card debt. Using it you can manage your payments accordingly. You can also check the score variation by month, and pinpoint the weak areas thus.
  • Credit monitoring: Of course, one of the best advantages of using free credit report is that you can use it to monitor your score easily. Before apply for a loan or a credit card you can check your report first, and if your score is low, then you can improve it first. With a high score your loan approval chance increases greatly.

If you are looking for an easy-to-understand yet premium free credit report tool, then simply fill out the form at freescoreindia. It offers an almost-accurate credit report which you can refer to if you don’t want to pay for the standard report, or just want something simpler.

What is P2P Lending? Why is it Trending?

For many decades banks were the only financial institutions that offered home loans, student loans, etc.  on a commercial basis. Then gradually NBFSs (Non Banking Finance Companies) such as Fullerton Credit, Muthoot Finance, Bajaj Finserv. etc emerged. However, as cases of loan defaulting started to become more and more frequent, and the interest rates went high, people began to look for alternative solutions that could be easy on the pocket, and also easily accessible. This was accomplished by P2P lending, which is catching up quickly in India.

What is P2P lending?

P2P lending stands for Peer 2 (to) Peer lending. It is the ultimate urbanisation of loaning and financing, as it offers an easily accessible, fast, and simple solutions for all your loaning needs.

To get a P2P loan you can choose any P2P marketplace that is available on the Internet, check if you meet the eligibility criteria, upload a few necessary documents, and if your application goes through you can get the money within 24-48 hours, typically.

What are the Advantages of P2P Lending?

P2P has numerous advantages over traditional loaning options, which is the reason why it is quickly becoming the most preferred choice for loan seekers.

Here are some of the best advantages of P2P lending:

Accessibility: One of the biggest problems we had with traditional loans was accessibility. To get a loan a person had to go to a bank in person, and submit an application for the same. If there was a holiday then the person would even need to wait till the banks opened. P2P lending has solved the problem successfully by allowing users to apply for loans on the Internet. No matter where you are, and what time is it, you can easily apply for a loan from your laptop or a smart phone.

Faster Release of Funds: With a P2P loan you can get your loan amount within a day or two after verification of your documents. This was much needed, as banks, and even NBFCs, take a much longer time for funds disbursal, that too if your loan gets approved.

Easier Obtainment- To get a loan from a bank or NBFC you have to have a good CIBIL score, and a decent, if not impressive, credit history. This is why a number of people who didn’t meet these requirements have to struggle and spend a long time applying for a loan in multiple banks. But this was a thing of yesterday. Today, you can get a P2P loan even if your credit score is below average. P2P lenders are more forgiving than banks, and you have a far greater chances of securing a loan from them than any traditional lender.

Flexibility- P2P lending also offers you a lot of flexibility in terms of loan repayment. You are free to shape the payment structure for your loan, and choose the duration, and the number of instalments. Usually you also get attractive interest rates, which are way lower than standard rates offered by banks.

How is P2P Lending Changing the Banking Industry in India?

Even though P2P has been existing, and rather popular, in first world countries such as UK and USA, it is still quite new to India. However, it is trending fast, and it is estimated that by the year 2020 the entire P2P lending industry would be at Rs. 30,000 crores.

Considering the significance and value of P2P lending RBI has already extended its support towards it by releasing draft regulation guidelines that will ensure that both the borrowers and the lenders can be benefitted as much as possible.

What Does it Mean For You?

Not only P2P lending is here to stay, it is quite possible that it will dwarf the traditional loaning options banks have been offering so far. As more and more lenders are emerging you can expect competitive interest rates, and attractive schemes.

If you want to enjoy flexibility in loan repayment, best interest rates, quick access to funds, and faster loan approval then P2P lending is a really good option. You can easily compare various lenders online and settle for one that is most suitable for your requirements.