What is credit score ?
A credit score is a three-digit number that rates your creditworthiness. FICO scores range from 300 to 850. The higher the score, the more likely you are to get approved for loans and for better rates.
A credit score is based on your credit history, which includes information like the number accounts, total levels of debt, repayment history, and other factors. Lenders use credit scores to evaluate your credit worthiness, or the likelihood that you will repay loans in a timely manner.
Different types of credit scores...
Your credit score is calculated based on the activity on your credit reports, provided by the three credit bureaus - Experian, Equifax and TransUnion. The two most widely used types of credit scores are FICO Score and VantageScore
A credit score in this range is considered poor. This score indicates that the individual has been late in paying equated monthly installments, credit card bills, or even defaulted on a loan or two. This score means that the credit bureau considers the individual to be at a high risk of becoming a defaulter, and banks and NBFCs would be wary to lend to such individuals.
A credit score in this range is considered average. This score means the individual has been struggling to keep up with their loans or EMIs. While banks and NBFCs might give a loan, chances are they will charge a higher interest rate.
A credit score in this range is considered good. This score suggests that the individual is doing the right things for the most part. Most banks and NBFCs will offer loans but still may not offer the best interest rates available.
A credit score in this range is considered excellent. This score implies that the individual has a solid repayment history and has consistently made credit payments on time. Banks and NBFCs will offer loans to such people at the best interest rate possible.
TransUnion CIBIL:
TransUnion CIBIL was established in 2000 and is the oldest and most popular credit bureau in India. CIBIL offers a variety of different products and services. For consumers, it provides CIBIL scores, credit information report, market insights, etc. and for businesses, it provides portfolio review reports, CIBIL company credit information report, CIBIL bureau analyser, etc. It costs Rs 550 for a credit report and score from CIBIL.
Equifax:
Equifax was granted a license by the RBI in 2010. For consumers, it provides credit information report, Equifax alerts, Equifax portfolio review, Equifax risk score, etc. and for businesses, credit risk and fraud management, portfolio management, industry diagnostics, etc. It costs Rs 400 for a credit report and score from Equifax.
Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent. experian credit report
Experian
While Experian was established in 2006, it received the license from the RBI in 2010. For consumers it provides Experian credit information report and for businesses, customer acquisition, collection and money recovery, customer management, data and analytics, and customer targeting and engagement. It costs Rs 399 for a credit report and score from Experian.
Most lenders use 720 to 750 as good score cutoff for CIBIL, whereas they would use 630 to 650 as good credit score cutoff for CRIF For Experian, this could be anywhere between 750 to 800. A score less than 750 on Experian is definitely not good score
CRIF High Mark:
CRIF High Mark has been operating since 2007 and received its license from RBI in 2010. For consumers, it provides CRIF High Mark credit information report and microfinance credit reports, and for businesses, commercial score, identification and anti-fraud services, predictive analytics and scorecards.
How to improve your credit score.
- Pay Your Bills on Time. ...
- Get Credit for Making Utility and Cell Phone Payments on Time. ...
- Pay off Debt and Keep Balances Low on Credit Cards and Other Revolving Credit. ...
- Apply for and Open New Credit Accounts Only as Needed. ...
- Don't Close Unused Credit Cards.