Credit score as an essential part of financial services has slowly caught up in India over the past few years. There are also more players in the market compared to as recently as a little over a decade ago. That said, in a shift from purely financial services, the usage of credit scores is now moving towards alternate services including telecom providers.

In fact, landlords tend to refer to credit scores prior to renting out their property, as do prospective employers to understand how reliable and trustworthy an employee will prove to be, especially when it comes to hiring for job openings involving confidentiality and trust. On a more personal front, people are requesting for credit reports even when finalising marriages!

What is a CIBIL score?

CIBIL is India’s oldest credit bureau, and hence enjoys the privilege of having credit scores being referred to as CIBIL scores colloquially. A score ranges between 300 and 900, and a higher score can prove to be advantageous when applying for a fresh line of credit.

In addition to CIBIL, there are three other credit bureaus, namely Equifax, Experian and CRIF High Mark operating in India as on date.

What is a free credit score?

In the USA, the Fair Credit Reporting Act (FCRA) requires each of the credit bureaus – namely Equifax, Experian and TransUnion – to provide a consumer with a free copy of the credit report, at the customer’s request, once every 12 months. These reports can be ordered simultaneously, or one from each company at a time. The Federal Trade Commission (FTC), the consumer protection agency in the United States enforces the FCRA with respect to credit information companies or bureaus.

In India however none of the credit bureaus offer free credit reports or scores currently, they are available to purchase on payment of a nominal fee. The process to obtain a score is both quick and easy, and it is recommended to check your score at regular intervals.

However, if you wish to have a free credit report, log on to, wherein India’s premier credit health management company in conjunction with the bureau offers a free credit report.

Why do we need CIBIL reports?

Seeing the significance that CIBIL report has assumed in the recent past, it is only prudent for an individual to monitor and keep track of their scores. Hence the requirement for scores is paramount, and a free score would go a long way in promoting awareness and increasing usage of reports countrywide.

Take for example a case wherein Nitin applies for a home loan. Owing to a good score, his loan is approved at a competitive rate of interest in comparison to Sumit, who has a relatively lower score and hence gets a similar home loan at a higher rate. This results in substantial savings for Nitin over the tenure of the loan, a privilege that Sumit does not enjoy.

Hence, in order to remain credit healthy and financially fit, it is imperative to have a good credit score.

What should be my next step?

From the options currently available, do call for a report and check it at length together with your credit score. You can choose to avail of the services of a credit health management company if you believe that your score needs attention, and can be improved. Working with a trained credit counsellor, you can rebuild your score and even enhance it given time and financial discipline.

Remember, it is the first step towards ensuring a secure financial future, so get started now.

(Written by Arun Ramamurthy, author of “Unlock the Power of Your Credit Score” : India’s first book on credit scores)

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