India has 4 agencies that maintain financial data (credit history, lending history, etc.) and demographics of individuals and companies. These are called “Credit Information Companies” (CIC) and provide data to banks, NBFCs and other credit lending institutions. These companies are under obligation by the RBI to maintain, update and process such data and share with the institution that seeks to lend loan to others.
The 4 CICs are:
1) CIBIL – this is the most commonly known CIC which generates the “CIBIL Score” of anyone seeking to get a loan from any banking institution or NBFC in the country. It is now known as TransUnion CIBIL limited and is generating the CIBIL score in India since 2007 and since 2011 to individuals. CIBIL score is the most reliable platform that banks and other lending institutes refer to when analyzing the credit worthiness of the borrower. Over 90% of the banks and FIs have held their managements in CIBIL and hence, a good CIBIL score goes a long way in getting a loan in the Indian market. It measures the ability to pay the loan amount
2) Experian – the company generates credit reports for individual consumers and provides other credit and loan related services too. The Experian Credit Score represents the probability of a consumer paying back his loan and/or credit.
3)CRIF High Mark Credit Information Services – provides its services to a wide array of companies, serving Micro, Small and Medium Enterprises, commercial and retail consumers, debtors and grantors and microfinance company consumers
4) EQUIFAX – this the oldest CIC in the world based in Atlanta, USA and came in India much after CIBIL as a combined-venture with 7 primary FIs. It maintains the data for individuals and businesses and generates credit reports for them.
From the above synopsis it’s very vague to distinguish between the credit scores of all these above listed companies. The underlying difference here is that CIBIL score carries the most weight when trying to penetrate the Indian system of lending and borrowing since CIBIL was formed in India and the rest are based out of the country and also most banks and NBFCs have held managements in CIBIL.
The credit scores generated by all these CICs follow different rules and guidelines which are unknown and hence, there can and will be a difference in each of these scores even for the same borrower. Most banks and FIs update the bureau of credit changes of investors on a monthly basis and the latest information is used to generate the credit score.
A strong CIBIL score helps you maintain an amicable relationship with the credit lending authorities which aids is getting loans/credit at possibly reduced rate than those who have a poor CIBIL score.