The Credit Information Companies (Regulation) Act, 2005 (CIC Act), a legislation enacted by the Government of India to manage the actions of credit information companies in India (CIC’s) and to facilitate efficient distribution of credit also as for matters connected to an equivalent .
Pursuant to the CIC Act, the Federal Reserve Bank of India and therefore the Government of India has enacted the Credit Information Companies Regulations, 2006 and therefore the Credit Information Companies Rules, 2006 issued under the Act, respectively.
BACKGROUND
In India there are four credit information bureaus – TransUnion CIBIL™, Equifax, Experian, and CRIF High Mark. These credit information bureaus are directly regulated by the Reserve Bank of India’s Department of Banking Operations and Development. As per the provisions of 2005 Credit Information Companies (Regulations) Act (CICRA), all banks, financial institutions and NBFCs are required to report every retail loan taken by a consumer to all or any or any four credit information bureaus. They also got to keep these credit agencies up so far on the consumer’s repayment behaviours. This allows lenders to use this data before issuing loans and to guage customers. According to RBI’s outsourcing policies for NBFCs and commercial banks, customer data is predicted to be kept in confidence.
It is mandatory for all financial institutions and commercial bank which provides/lending money and Credit Institutions (CIs) shall become members of all four CICs and submit data (including historical data) to them. All CICs and Credit Institutions shall keep the record of credit information collected/maintained by them in a proper manner and update their records regularly on a monthly basis or at such intervals as could even be mutually decided between the Credit institutions and therefore the CIC in terms of Regulation 10 (a) (i) and (ii) of the Credit Information Companies Regulations, 2006.
MEANING OF FINANCIAL INSTITUTION
Financial institution means a financial organization as defined in clause (c) of section 45-I of the Federal Reserve Bank of India Act, 1934 (2 of 1934) and includes a coupon fund company, a co-operative bank, a housing finance institution, an authorised person, a payment system operator, a non-banking financial company and therefore the Department of Post within the Government of India. [Section 2 (1) (l)
REGISTRATION OF AN NBFC UNDER EQUIFAX (A CREDIT INFORMATION BUREAU)
Equifax may be a credit information company and is one among four credit bureaus operational in India. It is an independent entity licensed by the Federal Reserve Bank of India (RBI) and registered under the Credit Information Companies Act, 2005, to supply its members with credit information products and related services. Banks, NBFCs and financial institutions are the members of Equifax. Member institutions are required to supply data regarding every customer’s credit-related activity. It collects and systematise this data on individual basis/corporate basis and provides in readable format.
This information enables lenders make informed decisions regarding lending and enables them to function during a more transparent and efficient manner and at a lower cost than is otherwise possible.
Member institutions report back to the agency (and the opposite credit bureaus in operation) on a periodic, generally monthly, basis about individuals’ credit behaviour. The agency, as mentioned before, then processes this information into a usable and readable form and provides credit information reports supported the knowledge provided by the members. It also provides a credit score and a number of other services amongst other related products.
As it is Credit rating agency so it maintains records of all borrowing and credit related activities of an individual and business houses including all transactions on loans, credit cards and borrowed monies. This extensive data provides by the agency enables lenders to understand the report of an individual/corporations so that they can take an informed decisions while evaluating prospective lenders for loans.
A credit information institution provides credit related services to lenders, borrowers, business houses and consumers.
TO THE LENDER, EQUIFAX PROVIDES
- A detailed description of a borrower’s credit pattern across all loan accounts held.
- The repayment history/behaviour of a borrower as reported by the lenders
- The identification information like name, address and other information of the potential borrower as mentioned by member companies
- Information on prospective borrower creditworthiness supported the info provided by the contributing members
- Access to Equifax ePORT (upon registration) which enables member institutions to look at all the above information.
TO THE INDIVIDUAL/BUSINESS CONSUMER, EQUIFAX PROVIDES
- Access to borrowers credit record as reported by the lender. This enables borrowers to make sure that the knowledge reported is accurate and up so far , thus helping eradicate duplication, misinformation and help identify fraud or ID theft.
- Access to credit information report helps keep a tab on one’s credit worthiness and repayment diary resulting in good credit behaviour.
If you’re an individual/NBFC looking to borrow, it’s advisable to first pull out your credit history and score to ascertain where your credit health stands. It is also suggested that you simply go carefully through an equivalent for errors and keep checking your credit information report (CIR) from time to time to stop possible misinformation.
TYPES OF CREDIT REPORTS PROVIDED BY EQUIFAX
Equifax Provides two types of Credit information report:
- Basic Report: This report is used by the borrower at a basic level. This report accompanied by the advanced algorithms, assists the clients in getting detailed knowledge of the borrower’s credit record/history. Equifax has vast database so it is widely accepted by the large number of lenders. Basic report is easy to read and understand.
- Enhanced Report: As the name indicates enhanced Report, provides visual graphics to explain detailed and exhaustive analysis of the client’s credit information and record of loans. In enhanced credit information report graphs and charts explain the utilization of available credit, defaults in payment etc. if any. This report is widely used in consortium finance by banks and financial institutions.
PROCESS OF REGISTRATION FOR EQUIFAX EPORT
It is an online portal available to the members online at the official website of Equifax. This virtual portal can be accessed by lenders, banks, and financial institutions to get credit record/history of an individual apply for borrow money from banks, financial institutions or private offices. Process of registration at Equifax ePort is given below:
PROCESS OF APPLY FOR EQUIFAX MEMBERSHIP
As it is virtual portal so an individual or NBFC can apply online at the official website of Equifax or can contact at the customer care number. Just follow the steps/instructions given at the portal or by the custom care assistant members to complete registration process. Once registration done successfully, an individual can access all the data available with Equifax.
PROCESS OF APPLY FOR EPORT ACCESS
The official website of Equifax provides a link by which an individual/NBFC can access to register for ePORT. Click on the link given and fill the required details like:
1. Full name of an individual
2. Name of a company
3. Existing Customer Account Number, etc.
LOGIN WITH THE ID GIVEN
After verification of the details provided at the portal Equifax provide a User ID and a password, with which one can login to the ePORT and access to all the services and credit information offered by Equifax Information Report of borrowers.
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