Credit scores are a significant part of your financial life as it is the credit score that influences everything from loan approvals to the interest rates you receive. In India, two primary credit bureaus, CIBIL and Experian, provide these scores. Both institutions collect and analyse your credit information to generate a score that shows your creditworthiness. Though they serve the same purpose, there are several differences in how they operate and calculate your score. It is important for you to understand these differences as it would help you manage your credit more effectively. This way you would also be able to take advantage of better financial opportunities.
So, let’s explore more about the difference between CIBIL score and Experian score.
What is CIBIL?
TransUnion CIBIL Limited, formerly known as Credit Information Bureau (India) Limited, is a credit information company in India. They keep track of your credit records and give you a credit score, which ranges from 300 to 900. This score shows how good your credit history is. A high CIBIL score reflects a good credit history, making it easier for you to get loans with better interest rates.
Also Read: 5 Facts about CIBIL Scores You Probably Didn’t Know
What is Experian?
Experian is a global data analytics and consumer credit reporting company. Like CIBIL, they also collect and analyse credit information to give you a credit score, which ranges from 300 to 900. Banks and lenders often use this score to decide if they should give you credit. Experian’s credit reports provide detailed information about your credit history, which eventually helps lenders make decisions to lend money.
CIBIL Score vs Experian Score- Differences
The major differences between the CIBIL score and the Experian Score are:
| Criteria | CIBIL Score | Experian Score |
|---|---|---|
| Presence | Only available in India | Present in 39 countries worldwide |
| Popularity | Most used credit score in India | Second-most popular credit score used by Indian lenders |
| Recognition | Licenced by the RBI | Recognised by the SEBI |
| Established In | 2000 | 2010 |
| Credit Score Range | 300-900 | 300-900 |
| Website | https://www.cibil.com/ | https://www.experian.in/ |
| Time for Offline Report Delivery | Takes up to 7 days | Takes up to 20 days |
| Subscription Charges | ₹550/month and ₹1200/year | ₹499/year |
What Does Your Credit Score Mean?
Credit score is the number between 300 and 900 and here’s what your credit score number generally represents:
| Credit Score Range | Creditworthiness |
|---|---|
| 750-900 | Excellent |
| 700-749 | Good |
| 650-699 | Fair |
| 600-649 | Poor |
| 300-599 | Very Bad |
How to Address Differences in the Credit Scores?
To handle differences between CIBIL score and Experian credit score, you may do the following:
- Get your credit reports from both CIBIL and Experian.
- Look for mistakes or differences in the reports.
- If you find errors, report them to the relevant bureau to fix them.
- Keep checking both reports regularly to stay on top of your credit status.
Also Read: How to Check Your Credit Report for Free?
Factors Considered When Calculating the Credit Score
The major factors that are considered when calculating the credit score include:
- Payment History
- Credit Utilisation
- Length of Credit History
- Credit Mix
- Recent Credit Activities
Ways to Improve Credit Score
- You must always pay your bills on time to improve your credit score.
- If possible, try to lower your debt as much as you can.
- Don’t open too many new credit accounts at once as it would hurt your credit score to quite an extent.
- Make sure to check your credit reports regularly for any mistakes.
Importance of Having a Good Credit Score
A good credit score is very important as it can help you get instant personal loans more easily, get better interest rates, and even get higher credit limits. When you have an excellent credit score, it shows that you are responsible with your money, which makes you a better candidate for lenders.
Conclusion
It is important to understand the differences between CIBIL and Experian. It would not only help you manage your credit better but also improve your credit score for better financial opportunities. But even if you have a low credit score and looking for personal loans, then worry not! With CASHe App, you can avail of instant personal loans with low credit scores at competitive interest rates and with a flexible repayment schedule.
FAQs
1. Is Experian credit score accurate?
Yes, Experian credit scores are accurate and used by many lenders. However, scores may differ slightly from CIBIL due to different methods of calculation.
2. Who uses Experian credit score?
Banks, financial institutions, and credit card companies use Experian scores to decide on loan approvals and credit terms.
3. What is a good Experian and CIBIL score?
A good score for both Experian and CIBIL is usually 700 or above. However, scores above 750 are considered excellent.
