1. What is a Credit Information Company?
A Credit Information Company (CIC) is an independent organizationlicensed by the Reserve Bank of India (RBI) that signs up banks, NBFCs and financial institutions as its members and aggregates data and identity information for individual consumers and businesses from its members. Credit reporting is very important in today's financial system and is considered a primary factor while evaluating the credit worthiness of customers and monitoring the credit circumstances of consumers and businesses. This information enables lenders to function more efficiently and at a lower cost than is otherwise possible.
2. What is the difference between a Credit Information Company and a credit bureau?
They are the same and are used interchangeably by most people.
3. Why is a credit information company important?
Credit information companies assume even more importance after credit default created havoc in the Western world, leading to the global financial crisis. Credit information companies inform banks whether a prospective borrower is creditworthy or not based on his past payment track record. The quality of information defines the ability of lenders to evaluate risk and of consumers to obtain credit at competitive rates. Credit reporting is a vital part of a country's financial infrastructure and is an activity of public interest.
4. Who are a credit information company's customers?
Credit information companies service individuals (wanting to access their own credit reports), lenders who access credit reports of their existing customers and prospective customers who are applying for new loans or credit cards and businesses who are borrowing from banks and financial institutions to keep a check on their reported credit history.
5. What information does a credit information company provide?
A credit information company provides:
To the Lender:
- A consolidated view of a consumer to a lender across all reported loans held
- The repayment history as reported by the subscribing lenders
- The identification information, address and other demographic information as reported by member institutions
- Topline indicators (derived attributes) based on the information provided by the data contributing members
To the individual/business/consumer:
- An ability for the consumer to access his credit record as seen by the lender to ensure that the information reported is accurate.
- Keeping a tab on one's credit worthiness and repayment track record.
6. Who should buy a credit report?
Every individual who is looking to borrow should ideally go in for a credit report. One should scrutinize the same for errors and keep checking his report from time to time. Ideally, one should pull out a credit report every quarter. The cost of each report will be Rs. 138 (including taxes/handling charges). This is a small price to pay for the assurance that your credit record is reflected correctly. To get yours today, click on Forms Credit Report Request