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Experian vs CIBIL: Which Credit Score Is Better for You?

Experian vs CIBIL: Which Credit Score Is Better for You?

An individual’s credit score is one of the most critical aspects of their financial lives. It is a crucial indicator of a person’s creditworthiness and often influences how likely they are to be approved for loans and other significant financial matters. In India, credit information companies (CICs) gather information from lenders to put together credit reports and scores for people based on their loans, repayments, and credit history. 

The RBI has approved four major credit information companies in India. These include TransUnion CIBIL, Equifax India, Experian India, and CRIF High Mark. Out of these, the most popular and widely accepted CIC in the country is the CIBIL score. The second most popular is the Experian score. 

Many people often ask what is Experian score and how it compares to the CIBIL score, commonly checked by Indian lenders. Knowing the Experian and CIBIL difference helps borrowers interpret variations in scores and make informed credit decisions. 

In this article, we will delve into the Experian vs CIBIL credit scores, the difference between CIBIL and Experian scores, and how to choose the right one for you.

What is a credit score, and why is it Important?

In India, a credit score typically refers to a three-digit number that displays an individual’s creditworthiness and ability to pay back loan amounts. Credit score ranges often vary depending on the CIC. For example, the two most popular CICs, Experian vs. CIBIL, have credit scores that range between 300 to 850 and 300 to 900, respectively. 

A credit score of 750 or above is considered to be good. Lenders are likely to approve loans and credit cards to individuals with higher credit scores and good credit reports. They may also offer better repayment terms and interest rates.

What is Experian Credit Score?

Experian is a global credit information company (CIC) that operates in more than 32 countries. It offers services like credit risk management, targeting marketing offers, fraud prevention, and other data and analytical tools. Experian also collects information to create credit reports and scores for businesses and individuals.

In India, Experian is one of the most popular CICs. The Indian branch of Experian Credit Information Company of India was formally started in 2009. This CIC is recognised by the Securities and Exchange Board of India (SEBI). Experian’s credit scores vary, with some ranging from 300 to 850 and others between 300 and 900. Checking your credit score for Experian can be done for free online.

What is CIBIL Credit Score?

TransUnion CIBIL is the most well-known and popular credit bureau in the country. It is also one of the oldest CICs in India, and most leading organisations are members of it. It collects, analyses, maintains, and compiles borrower information from various lenders.

This information is then used to create credit reports, credit scores for individuals, and CIBIL ranks and reports for organisations. CIBIL scores for individuals range from 300 to 900. You can check your CIBIL score online to gain insight into your credit history.

Difference Between CIBIL and Experian Credit Scores

While both show organisations and individuals their credit scores and reports, your Experian credit score vs CIBIL score may differ. The Experian and CIBIL difference could be caused by several reasons, which include:

1. Credit ranges

The most noticeable Experian and CIBIL difference is their credit ranges. Experian’s scores range from 300 to 850, while CIBIL’s scores range between 300 and 900. For Experian, a score above 700 is good, while a score above 800 is excellent. For CIBIL, a score higher than 700-750 is also considered good.

2. Scoring Model & Calculation Method

Another significant Experian and CIBIL difference is their scoring models. Experian uses the FICO model to determine credit scores, widely used in other countries like the USA. It takes into account payment histories, credit mixes, and other factors. On the other hand, CIBIL’s scoring model is more suited to the financial environment in India.

3. Types & Scope of Data Used

Experian uses data from various sources, including financial institutions, credit card companies, and public records. It also examines an individual’s payment history for rent, utility bills, and other factors. This information is then used to create and assess an image of a person’s financial habits.

CIBIL, on the other hand, primarily collects data from its member institutions., which are mostly limited to financial institutions. Due to CIBIL’s narrower scope, credit scores between the two CICs may differ.

4. Weightage assigned to different factors

While both Experian and CIBIL look at many common factors (like the length of a person’s credit history, utilisation ratios, credit payment history, and more), the weightage assigned to these factors varies between the two CICs. This Experian and CIBIL difference could also affect the credit scores provided by them.

Experian vs CIBIL: Pros and Cons of Each Bureau

Each of the credit bureaus has distinct strengths for assessing creditworthiness. Let’s look at the pros and cons of Experian vs CIBIL one by one. 

Experian Pros and Cons

Pros: Collects data from wider sources including telecom and utility companies, global expertise, and faster updates. 

Cons: Lower lender adoption and limited historical depth compared to CIBIL. 

CIBIL Pros and Cons

Pros: Has a dominant market position with over 90% acceptance among Indian lenders. It has deeper historical data, stronger relationships with traditional lenders, and is widely recognised as India’s trusted credit bureau.

Cons: Slower updates, stricter for new borrowers, and scoring model specifically designed for Indian markets.

How can you address the difference between CIBIL and Experian scores?

Due to the different ways CIBIL and Experian collect and calculate their data, there may often be discrepancies between the credit scores they provide. To rectify these, individuals can take specific steps:

– Keep the necessary documents handy. This could include payment receipts, account statements, and others.

– Each bureau has specified steps for submitting grievances. For example, Experian can be contacted via phone, email, or online to get support, and CIBIL offers online resources and contact points.

– Present your problem in detail, with the necessary proofs and documents.

– Remember to follow up on the issue every few days until it is resolved.

How to Check Experian and CIBIL Score Online (Step-by-Step)

Here is a step-by-step process of how to check Experian score online:

  • Go to Experian India’s official portal at experian.in.
  • Locate the credit score access button positioned in the upper right corner of the homepage. 
  • Sign in using your registered mobile number and password. First-time users should select the registration option to create an account.
  • Authenticate your identity by submitting the OTP received on your phone.
  • Provide the necessary personal details as requested and proceed through the verification steps.
  • Once completed, your Experian credit report will be generated and displayed for your review.

Follow these steps to check your CIBIL credit score:

  • Navigate to the CIBIL official website at cibil.com.
  • Look for and select the option to access your free credit score and report.
  • Enter required personal information including your full name, email ID, Permanent Account Number (PAN), and birth date.
  • Complete the authentication process by entering the one-time password (OTP) delivered to your registered mobile number.
  • Access your dashboard to review your credit score and comprehensive credit report.
  • CIBIL offers one free annual report viewing. For more frequent monitoring, paid subscription plans are available.

Experian vs CIBIL: Which Score Do Lenders Prefer?

Experian and CIBIL are well-established, equally valid CICs. Lenders across the country widely accept their credit scores. Due to RBI mandates, both CICs receive the same information from lenders. However, most credit institutions consider CIBIL the standard in India, giving CIBIL scores an edge in the Indian market.


Conclusion

Credit scores are crucial to an individual’s financial life. Healthy financial habits like creating and sticking to a monthly budget, repaying loans and credit cards on time, and having a low credit utilisation ratio can ensure your credit score remains high, whether you choose CIBIL or Experian.

Seeking guidance from experts can also help you achieve your financial goals. For expert advice and guidance regarding your finances, visit the Tata Capital website or download the app today!

FAQs

Why is my Experian score lower than my CIBIL score?

Your Experian score may be lower than your CIBIL score because each bureau uses different data and algorithms. The difference comes from how your credit information is collected and reported.

Which is better Experian or CIBIL?

Both Experian and CIBIL are trusted credit bureaus in India. The preference depends on the lender, as some rely more on CIBIL while others may refer to Experian.

Which credit bureau is more widely used in India, Experian or CIBIL?

CIBIL is widely used in India and is often the first choice for banks and lenders. It has a longer presence in the Indian financial system.

What are the advantages and disadvantages of Experian & CIBIL credit scores?

The main advantage of checking both Experian and CIBIL scores is that you get a broader view of your credit profile. A disadvantage is that the scores may vary, which can cause confusion.

Which is more accurate in India: Experian or CIBIL credit score?

Both bureaus are equally accurate using their own validated algorithms. CIBIL just has more acceptance among Indian lenders, while Experian brings global expertise with advanced analytics.

Why is my Experian score different from my CIBIL score?

The difference between CIBIL and Experian score is because each bureau uses different scoring algorithms and credit score ranges. They also collect data from different sources. These variations are normal and don't indicate errors.

Which credit score do Indian banks prefer for loans and credit cards?

Most traditional lenders primarily check CIBIL scores, though some also review Experian or other bureaus.

Can I get a loan if only my Experian score is good but my CIBIL score is low?

It depends on which score your lender prefers. Most traditional lenders prefer CIBIL scores of 700 or above. However, some fintech lenders and NBFCs may consider Experian scores.

What is considered a good Experian and CIBIL score in India?

For both bureaus, a score above 700-750 is generally considered good. CIBIL scores range 300-900, with 750+ considered excellent. And Experian ranges 300-900, with scores above 800 indicating ample creditworthiness. 

Does checking your Experian or CIBIL credit score lower it?

No, if you frequently check your credit score, it’s considered a soft inquiry, which does not affect it. Only lender-driven hard checks can lower your score.

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