What Is a Credit Score? - 6 credit bureaus in India

A credit score is the measurement of your creditworthiness, which means your ability to pay back loans on time.

It is a 3-digit number representing your ability to pay back loans. Its range starts from 300 and ends at 900. You should always and constantly strive to get the score closer to 900 because that’s when you’ll get the best loans.

When we say best loans, we mean the credit cards with a large credit balance, loans with low interest rates, friendly and flexible terms, and more. When your score is closer to 900, it shows lenders you have been a responsible borrower, and giving you a loan won’t be risky for them.

Conversely, the further you are from 900, expect less loans to be given. This is because a low credit score shows you were not a responsible borrower. Perhaps you had:

• missed payment 

• defaulted on a loan

• taken too many loans within a short time

By the way, when we say try getting your score towards 900, understand you cannot realistically reach 900. No one has. The maximum you can hope to reach is around 850, which is an excellent score by the way.

Credit scores are calculated by entities called credit bureaus.

There are 6 credit bureaus in India:

1. TransUnion Credit Information Bureau (India) Limited 

2. Equifax

3. Credit Rating Information Services of India Limited 

4. CRIF High Mark

5. ICRA (formerly known as Investment Information and Credit Rating Agency of India Limited)

6. Experian

Equifax, TransUnion, and Experian are the three main ones. They take into consideration several factors like your credit history, number of credit inquiries, repayment records and others.

Your credit score is checked by banks other lenders whenever you apply for a loan or credit card. They check your creditworthiness every time before giving you loans and credit cards.

The higher your credit score, the better your loans are, and vice versa. High credit score enables you to get discounts and preferential pricing on interest rates, which people with low score can’t hope to get!

If you have a high score, you can use it as a bargaining chip while shopping for credit. Lenders will give you high preference over others.