Which Credit Score is Important in India: Equifax or CIBIL?
Equifax and Mycibil are credit reporting agencies. They both gather financial data from several economic firms all over the globe. They assign credit profile ratings based on data collected regarding customers and firms. They are 2 of the 4 credit data firms licensed in India. Experian and High Mark are the two surviving credit reporting agencies. These firms collect and record your credit-related events. The data is then analysed to build credit scores and create credit reports for you.
What Exactly is an Equifax Credit Score?
The credit score is a 3-digit figure that represents your solvency. It assesses if you would be likely to repay your credit card debts after getting a loan. The Equifax credit scores will vary between 300 and 900. If your credit score is near 900, the institution may accept your loan demands faster than those with lower credit ratings.
Several metrics and criteria are used to produce the Equifax credit score. This system takes into account the sums you handled in the past. If you complete your returns on a date or otherwise, your data and the length of your previous loans are taken into account.
The credit history does not quickly inform you if you are competent to apply for credit cards and loans. Your banker can tell whether you’re a liable lender by checking your credit score.
When your credit rating sustains over 750, it’s still good. If your credit score is below 600, focus on raising it before applying for credit cards and bank loans. Pay your monthly taxes, EMIs, and loans on schedule and never miss a payment. These are the primary elements that have a vital impact on your credit score.
Importance of Equifax Credit Score
It is vital for you to have a high credit score. Many entities, such as banks or firms, may examine this score before granting you credit or a job.
Here’s a brief rundown of why having a great Equifax credit score can be crucial for you.
- Property searching is simpler: Many landlords currently use your credit score and credit history when deciding your capacity to pay rent timely. If you want to rent a property, having a strong Equifax credit score makes it simpler.
- You have better job prospects: Your Equifax credit score may be vital to a future job. For any given job, you appear to be a more competent applicant with a strong credit rating.
- You can reach your life aims more quickly: Many life motives, such as buying a house or car, need loans. You can also use credit cards to assist in paying for various life goals, such as a foreign trip. So, a strong Equifax credit score allows you to obtain credit. Then, you may be able to pay for and attain your goals in life faster.
What Exactly is a CIBIL Score?
The Credit Info Board of India Ltd. assigns you a CIBIL score/credit score. This indicates your solvency and capacity to repay the loan within the deadline.
CIBIL is a 3-digit score analysed based on your financial record. The CIBIL score runs from 300–900, with higher scores indicating a greater probability of loans being granted. According to Mycibil data, most loans are for people with credit scores of 750 or above.
Multiple elements determine your CIBIL scores, such as your payment record, starting and current loan amounts, and others. Banks and financial firms keep in mind different factors when granting loans to you.
The Value of the CIBIL Score
The CIBIL score is vital since it benefits both the bank and the client in various ways:
- The CIBIL score informs you about your credit condition. Good financial management will always get you a high Mycibil score. A lower CIBIL score indicates that you have poor credit. Therefore, banks would not lend to such clients.
- If you have a high Mycibil score, a bank may issue you a loan with a low-interest rate and less paperwork. If your CIBIL score is very low, lenders reject your loan request. Banks also issue you loans at a high-interest rate. Of course, the CIBIL score isn’t the only factor that defines whether a bank will offer a loan to you.
- Many factors assist these firms in specifying whether to approve your loan request. However, your CIBIL score is quite vital when banks provide loan rates. If you have a high CIBIL score, you may be eligible for a loan at a lower interest rate. If you have a low CIBIL score, you will qualify for a loan at a greater interest rate.
Vital Credit Score: CIBIL Vs Equifax
| Factor | Equifax | CIBIL |
| The cost of having a report | Rs. 399 (report and score) | Rs.550 (credit report and score) |
| Report period | 7 years | 7 years |
| Services provided | For you: -Report on credit data-Alerts from Equifax-Equifax risk rating-Equifax account review For firms: -Credit risk and fraud control -Portfolio administration-Industry inspections, etc. | For you: -TransUnion Rating-Report on credit information-Market research For firms: -Company credit info report Mycibil-Bureau Analyzer CIBIL -Report on Asset Review |
| Partnering with NBFCs and banks | 7 major banking groups | 35 bank and NBFC ties |
- As stated before, each agency has drastically different traits and results. Your cost of gaining a report from Mycibil is markedly more than that of Equifax.
- When analysing CIBIL versus Equifax credit score, bear in mind that the former has fewer partnerships with banks and NBFCs.
- In Equifax, you may only make payments via demand drafts. You may make payments at CIBIL with net banking and debit or credit cards.
Conclusion
The goal of any instrument used by you is to measure your solvency. Whether it’s an Equifax credit score or other credit ratings, it is used to predict how certain you are to pay your debts. Managing on-time payments and using credit wisely in the past are indicators of repaying debts in the future. You can check your credit score and learn more about Equifax Credit Score and Mycibil by going to the Piramal Finance website. Help yourself to the knowledge of wide-ranging financial products and services on their website, especially credit cards and personal loans.