Credit bureaus in India and which reports to call
In India, four credit information companies hold borrower data reported by every NBFC: CRIF High Mark, Equifax, Experian and TransUnion CIBIL. Each CIC builds its own report from the shared file, and the appraisal uses CIC reports. A report that meets the rule can coexist with a no-hit elsewhere, and that second source can decide the assessment of a first-time borrower. You choose which CICs to call and cross-check, and where the best data for each applicant is available.
Each CIC builds its own credit report
The four credit information companies (CICs) registered under the Credit Information Companies (Regulation) Act, 2005 (CICRA) are the institutions behind these reports. A credit information report (CIR) is the report used in appraisal. The Reserve Bank of India (RBI) sets the relevant directions for NBFCs.
The four companies are:
| CIC | Company | Registered |
|---|---|---|
| CRIF High Mark | CRIF Credit Information Services Pvt Ltd | 25 Nov 2010 |
| Equifax | Equifax Credit Information Services Pvt Ltd | 26 Mar 2010 |
| Experian | Experian Credit Information Company of India Pvt Ltd | 17 Feb 2010 |
| TransUnion CIBIL | TransUnion CIBIL Ltd | 5 Mar 2012 |
An NBFC that is a credit institution must be a member of all four and report to each. Each CIC’s report is its own view of the shared reporting file.
One or more CIC reports can support appraisal
The RBI directions allow you to use a report from one or more CICs, so one report can meet the appraisal requirement. Use a second report when it adds value to the appraisal.
Each CIC builds its own report and products on the shared reported information, and price is part of the choice too. I would keep the ability to cross-check more than one source and use the source with the best data for each applicant.
A first no hit calls for another source
The RBI lists, as a best practice, that a first-time borrower’s application should not be rejected just because there is no credit history. If the first CIC returns no history, try another source before deciding.
Calling a second CIC only when the first has no hit reserves the extra call for applicants whose first report lacks history. Calling both gives you another view on more applicants. Compare the cost and outcomes on your own book with the data source waterfall tool, including which good and bad applicants each source identifies.
RBI reporting duties shape the appraisal
| Step | The duty | Where |
|---|---|---|
| Membership | All four CICs | Reporting Directions para 6 |
| Reporting | To all four, as on the 9th, 16th, 23rd and month-end | para 10 |
| The appraisal | Reports from one or more CICs | para 20 |
| No history | Not a reason on its own to reject (best practice) | para 38(5) |
| A default | SMS or email to the borrower when reported | para 34(1) |
| A rejection | Written reasons if you are a housing finance company | HFC Directions para 135 |
| Microfinance | Repayments within 50% of household income, checked against CIC data | Credit Facilities paras 55 to 58 |
Also watch for the CIC’s alert when more than one lender accesses a borrower’s report within the month. The CIC sends an SMS or email to the borrower whenever a lender accesses their CIR, and alerts the lenders that pulled the report when another lender accesses it in that period.
You control the order of CIC calls
One CIC, a second CIC only after a no-hit, and both CICs on every appraisal are different calling orders. They can differ in cost and in the applicants each source identifies, so compare them against your own applicants rather than choosing by brand.
Decisimo is one option for running a decision flow you control. It can request data through REST APIs or SOAP web services and return an outcome with a reason. The source order remains your decision.
- Join all four CICs and report data as of the 9th, 16th, 23rd and last day of each month.
- Use a report from one or more CICs in the appraisal.
- If the first CIC has no history, try another source before deciding. Assess a first-time borrower using available information beyond the missing history.
- Watch for the CIC’s alert that another lender accessed the same report within the month.
- When reporting a default or days past due, notify the borrower by SMS or email.
- If you are a housing finance company, give the reasons for a rejection in writing.
- If you lend microfinance, check household indebtedness against CIC data, borrower declarations, bank statements and local enquiries. Keep monthly repayments on all household loans, including the proposed loan, within 50% of monthly household income.
- Keep CIC calls in a decision engine you control, so no single CIC’s product determines which source you call.
- Compare the cost of calling one CIC, calling a second only on a no-hit, and calling both against your own applicants.
Questions about credit bureaus in India
How many credit bureaus are there in India?
Four credit information companies are registered under CICRA: CRIF High Mark, Equifax, Experian and TransUnion CIBIL.
Does an NBFC have to report to all four credit bureaus?
Yes. Every NBFC that is a credit institution must be a member of all four CICs and report to all four.
How often must an NBFC report to the CICs?
Report data as of the 9th, 16th, 23rd and last day of each month.
Do I need more than one credit report to approve a loan?
No. One report can meet the appraisal requirement. You can call another source when it adds value, including when the first report has no history.
Can I reject an applicant with no credit history?
The RBI lists not rejecting a first-time borrower just for having no credit history as a best practice.
Must I give reasons when I reject a loan?
If you are a housing finance company, yes. You must give the reasons in writing.
